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PUBLIC ECONOMY. 



PUBLIC ECONOMY 



FOR THE 



UNITED STATES. 



i:j r 



CALVIN COLTON, LLD,, 

PROFESSOR OF PUBLIC ECONOMY, TRINITY COLLEGE. 



THIBD EDITION. 



NEW YORK: 

PUBLISHED BY A. S. BARNES & CO. 

NO. 51 JOHN STREET. 

CINCINNATI: H. W. DERBY & CO. 
1856. 



HSi(o 
.C73 



Entered, according to Act of Congress, in the year 1848, 

By CALVIN COLTON, 

in the Clerk's OflBce of the District Court of the United States, in and for the Southera 

District of New York. 



STEREOTYPED BY REDFIELD &, SAVAGE, 
13 Chambers Street, N. Y. 



NOTE. 



All the reasonings of this work on European society, 
are based on the status quo of its condition before the 
convulsions of 1848. It must be seen that these recent 
and current events are not sufficiently ripe to be used 
as materials in a w^ork of this kind. 



CONTENTS. 



CHAPTER I.— Preliminary Remarks page 17 

The Task attempted in tliis Work. — The Doctrine of Free- Trade Economists not a Sci- 
ence. — This false Pretension a stolen Shield. — On common Ground, Free-Trade Econ- 
,omists have done some Good. — This Work a System for the United States. — The New 
Features of this Work not Novelties. — The proper Functions of Hypothesis. — Free- 
Trade Economists have made an unjustifiable Use of Hypothesis. — It leads to no Result. 
— Mill's, Comte's, Newton's, and Reid's Views of Hypothesis. — Reasons for the lim- 
ited Scope of this Work. — Reasons for changing the Name of the General Subject. — 
Politics and Political Economy. — The Comprehensiveness of this Work, and the Unity 
of its Plan. 

CHAPTER II.— The New Points of this Work page 26 

What is meant by these New Points. — The First: Definition of the General Subject. — 
Importance and Influence of Definitions. — Public Economy not heretofore reduced to a 
Science. — The Definition here given of the Subject is consistent with a Science. — It res- 
cues the Subject from an embarrassed Condition. — The Free-Trade Theory composed of 
uniform Propcsitions. — The Exact Sciences. — All Sciences, when fully constructed, are 
necessarily exact. — Science appertains to all Subjects. — The Science of Sociology, as 
announced by M. Comfcte, in an imperfect State. — John Stuart Mill's Definition of Sci- 
ence. — Why the Science of Sociology is Imperfect. — Mr. Mill, a Free-Trader by Sym- 
pathy, has demolished the Theory by Logic. — Citations of a remarkable Character from 
Mr. Mill. — What they prove. — Private and Public Economy compared. — Napoleon on 
this Subject. — Common Principles in Systems fundamentally different. — How our Defi- 
nition affects the General Argument. — Empirical Laws defined. — Public Economy, down 
to this Time, lies scattered over the Field of Empirical Laws, and has not been reduced 
to a Science. — The Free Trade Hypothesis belongs to a Category of Empirical Laws 
incapable of being reduced to a Science. — The recognised Canons of Experimental In- 
duction, as laid down by Logicians, fully sustain the Claims of Protection against those 
of Free Trade. — The Formation of the Science of Public Economy is yet in Abeyance 
to some skilful and competent Hand. — A Science can not be made out of the Laws of 
Public Economy, except for one Nation, each by Itself. — The true Position of Labor. — 
Labor robbed of its Rights by a False Position in Public Economy. — Protective Duties 
not Taxes in the United States, but a Rescue from Foreign Taxation.— How Public 
Economy is affected by different States of Society. — New Points in regard to Money 
and a Monetary System. — The Reasons for Free Trade, with the People, are Reasons 
for Protection. — All desire the same Thing. — The Destiny of Freedom not yet achieved. 
— The Protective Principle identical with that of the American Revolution. — Free Trade 
in Great Britain not based on Science, but on Public Policy. — Rise and Progress of the 
Free-Trade Theoiy. — Definition of Freedom. — An American System of a Peculiar Char- 
acter. — Free Trade identical with Anarchy. — Protection can never be dispensed with, 
in any supposable Perfection of American Arts. — Agricultural Labor and Products in 
the Guise of Manufactures. — Not two Kinds of Economy. 



8 CONTENTS. 

CHAPTER III.— Meaning of Free Trade page 60 

The domestic Origin of the popular Application of the Terms, Free Trade.— Their Ad- 
Captandum Features.— The Unfairness of taking Advantage of these Features.— The 
true Meaning of Free Trade, directly the Opposite of what is commonly supposed. — Jus- 
tice on the Side of Protection.— Free Trade, to be Just, requires that all Nations should 
be one Family. — Universal Free Trade would create one great Central Power, at the 
Expense of all the Rest.— Weak Powers can only be defended against the Strong by a 
Protective System. — The Free-Trade Millennium an Absurdity. — Expensive and Cheap 
Organizations of Society, as they affect this (Question. — American Instincts on the Rights 
of Labor. — The Objections to Protection are the Reasons for It. — The Free Trade of 
Adam Smith not the Free Trade of the Present Time. 

CHAPTER IV. — Free Trade a License for Depredation on the Rights of 
Others page 69 

This a New Position.— It is based on the Principle of Anarchy.— The Essence of Free 
Trade is a Plea for no Law over an important and wide Domain of Interests. — Defini- 
tion of this Domain. — Nations are Commonwealths, and may be vulnerable or injurious, 
in their Relations to each other, the same as Private Individuals in each. — The Defensive 
of Man's Position, in all Circumstances, requires most Care, and costs Most. — Time only, 
and protracted Experiment, will determine the relative Merits of Free Trade and a Pro- 
tective System. — The Pointof Vulnerability in the United States, opened by Free Trade. 
— The great Problem one of Figures and duantities, that can be worked out. — The 
Negative Losses occasioned to Individuals and to the Country, by Free Trade, though 
Real and Serious, not easily ascertained. — More and greater Interests at Stake, on the 
Ground proposed to be given up to Anarchy by Free Trade, than anywhere else. — The 
Hen and Chickens and Hawk, are like Nations and Free Trade. — How this Anarchy of 
Free Trade operates. — It is real Anarchy quo ad hoc, opening a vast Field for Depre- 
dation. — Free Trade is the Sway of the Will of the Individual, as opposed to that of 
Society. — The Principle of Free Trade everywhere at Work* for Depredation. — Free 
Trade not equally Fair for both Sides. — Great Britain not for Free Trade. — An important 
Confession of a Member of Sir Robert Peel's Government. — The Absurdity of making 
Laws for the less important Sphere, and doing without Law in the most important. — 
The Charge of Free Trade against Protection, falls back on Itself, in precisely the same 
Form. — Under Free Trade we are forced to buy, in the Form of Manufactures, the same 
Things which we produce, while our Products perish on Hand. — Answer to Objections 
to the Theory of this Chapter. — Free Trade operates, through a second Party, to injure 
a third Party, and the Scope of this Influence takes in whole Nations, as Subjects of its 
Depredations. 

CHAPTER V. — Reasons of the Rise and Progress of the Theory of 
Free Trade page 87 

The Prevalence of Free Trade makes a Problem. — The Rules by which it is to be solved. 
— British Writers and Literature on this Subject. — The Free-Trade Epoch. — British 
Legislation for Protection, and the Effect of this Policy for a Century previous to Adam 
Smith. — Treatment of the American Colonies under the Crown. — Its Inconsistency witli 
Free Trade. — Free Trade in Great Britain a State Policy, not a General Principle. — 
Adam Smith employed by the British Government to write his Book. — His Inconsistency 
and Self Contradiction. — Examples. — The chief Aim of Adam Smith, was to reconcile 
the American Colonies to Injustice. — Free Trade a British Instinct and Selfish. — M'Cul- 
loch's Betrayal of British Policy. — The Authority of British Writers on Free Trade. — 
Their Authority in our Schools, and in forming the Minds of our Statesmen. — Obsequious- 
ness and Servility of American Free-Trade Economists. — Free Trade a one-legged 
Science. — Bom in the Closet. — British Free-Trade Writers Employees of the British 
Government. — History of Free Trade as a Party Question in the United States. — Its 
Prevalence here owing to Social Position and Obsequiousness. — Instincts of the Ameri- 
can People in Favor of Protection. — Free Trade can not be the permanent Policy of the 
United States. 



CONTENTS. y 

CHAPTER Vr. — Great Britain the only Nation thAt is prepared for 
Free Trade, and the United States the last that can afford it . page 100 

The Importance of Position, in all Competition, illustrated by familiar Examples. — Adam 
Smiths Illustration. — The Tribe or Nation that is ahead in Manufactures, can keep ahead, 
by Free Trade. — The first Lessons on Protection to Great Britain. — The Way of her 
Beginning, and its Results. — It was by this System that she was able to triumph over 
Napoleon. — Great Britain was Poor when she began her Protective System. — Behold 
the Consequences. — Great Britain always consults the Parties interested in Protection, 
and complies with their Wishes.— Not so the United States. — A remarkable Example of 
turning Witnesses out of Court. — British Manufacturers, from the Strength of their Posi- 
tion, have consented to dispense with Protection. — M'Gregor's Evidence and Advice to 
the British Government. — MCulloch's Confession. — Action of the States of Europe, after 
the Overthrow of Napoleon, in Favor of Free Trade. — Their Repentance. — Repent- 
ance of Russia. — Manifesto of Count Nesselrode. — The ZoU-Verein Treaty. — Napoleon's 
Policy. — ^^The Policy of the European Continental Nations against Great Britain, defen- 
sive. — The greater Cost of Money and Labor in the United States an insuperable Bar 
to Free Trade. — The Weak, not the Strong, require Protection. — British Free Trade, 
not Free Trade.— British Differential Duties retained.— Effect of Commercial Treaties. 
—The Whole Truth in few Words. 

CHAPTER VII. — Freedom consists in the Enjoyment of Commercial 
Rights, and in the Independent Control of Commercial Values fairly 
acqttiiied , page 114 

The Novelty and Importance of this Proposition, a Reason for giving it an early Place in 
this Work. — What is Meant by it. — Definition of Commercial Rights and Values. — 
Liberty not synonymous with Freedom. — Rights as distinguished from Liberty. — Free- 
dom, not an Abstraction, but a Reality. — Is a definable Substance. — The Objects of 
Despotism of every kind, even Spiritual, are Commercial Values. — All Religious Privi- 
leges are Secured and Fortified by Commercial Values. — Freedom requires, that all 
Taxes should be Voluntary, by a Representative Voice. — Otherwise they are an Ex- 
tortion, and not Freedom. — "Voting Supplies." — The British Government more imme- 
diately under the Control of Popular Freedom than that of the United States. — The 
Mexican War an Example. — Many things are called Freedom which are only its Acci- 
dents and Results. — A reasonable Man will be contented with Freedom as here de- 
fined. — A Man's Commercial Rights includes his Chances in the Future. — The Blood 
of Martyrs shed on Account of Commercial Values. — The Test of the Principle con- 
tended for. 

CHAPTER Vin. — What caused the American Revolution. — History or 
the Protective Policy in the United States page 126 

A Restatement of the Object of this Work, and of the great Error of the Economists. — The 
Theme of this Chapter important as a Starting Point in the General Argument. — The 
Instinctive Policy of a Parent State toward Remote Dependencies, fatal to the End in 
View. — Such was the Policy of Great Britain toward her North American Colonies. — A 
Review of that Policy. — The Doctrines of Joshua Gee. — Their Influence on Parliament 
and the Board of Trade. — Acts of Opposition and Wrong Provoked the Revolution. — 
Declaration of Independence. — Commercial Values, as the Fruits of Labor, the Occasion 
of the Contest. — The Position of the Free-Trade Economists as to the Elements of this 
Controversy. — They were forced to justify Wrong. — The Wrong a Commercial one. — 
The Aim of the Revolution was to break down the Old, and to establish a New System 
of Public Economy, that is, a Protective System. — The Struggle was based on the Prin- 
ciple of Mine and Thine, as it determines Commercial Rights. — A Protective System of 
Society the great Object in this Country from the First. — The great Movement from 
Europe to America was and is for this. — The Confederation a Rope of Sand. — A Pro- 
tective System the great Object of the Federal Constitution. — One of the first Acts of 
the new Congress was to establish a Protective System. — Documentary Evidence for 
Fifty Years, that Protection was the Uniform Policy of the Country. — The Cause of 
Apostacy from this Ancient Faith. 



10 CONTENTS. 

CHAPTER IX. — The Destiny of American Freedom not yet Achiev 

ED PAGE 142 

The general Desire for Freedom, before and after the Discovery and Settlement of Amer- 
ica. — American Independence an Epoch of Freedom. — "An American System" means 
much.— It is a " Commercial System."—" Political" the Shadow, " Commercial" the 
Substance.- The Responsibility of a Nation that has Freedom in Trust for Posterity and 
for Mankind. — Faith as a Power in Man for the Attainment of Freedom. — The Advo- 
cates of Freedom are in general practically Right, though often theoretically Wrong. — 
Freedom yet in its Cradle. — The vacillating Policy of the Country in regard to the 
Means of Freedom. — Seventy Years of the Era of American Freedom gone, and yet 
Freedom was to be Defined. — The People have much to Learn on this Subject. — What 
Great Britain and Europe Desire. — The Jeopardy of American Freedom. — Free Trade 
would throw it away — would Sell It. 

CHAPTER X. — The Different States of Society in Europe and America 
REQUIRE Different Systems of Public Economy page 151 

The three fundamental Elements of European Economists. — Adam Smith's and Ricardo's 
Statement of them. — These Elements do not exist in the United States as a Rule, but 
only as Exceptions. — The Ancient System of European Society gives Character to 
the Modern. — The economical Position of the Laborer there, the same as that of the Ox 
or the Slave. — This Position assigned to Labor by European Economists, as proved by 
their own Statements. — The Theory of Malthus justifies this Position.— This Doctrine 
pervades the European, and has been transferred into American Systems of Economy. 
— The prevalent Principle of Land Tenures in Europe fundamentally different from 
that which prevails in the^United States. — " Rent" the lord of all in Europe. — The Prin- 
ciple of Serfdom and Villanage, under other names, still prevails in that quarter of the 
World. — Labor doomed there. — American Society fundamentally different. — The same 
System of Public Economy can not apply to each. — Reform in America, slow, but sui-e. — 
Can only be effected by Public Economy. — Free-Trade Economy hostile to Popular 
Rights. 

CHAPTER XI. — Education as an Element of Public Economy in the Uni- 
ted States page 169 

Education a Thing of Commercial Value. — The American People the Original Statesmen 
of the Country. — The American Republic an Experiment for the World. — Difference 
between the European and American Theory of Society. — Knowledge makes the Dis- 
tinction between Freemen and Slaves. — Character of the First Settlers of this Country. — 
They were Men of high Culture. — General Education made the Basis of their New 
State of Society. — Education the Power that achieved American Independence. — It is 
the most Important of all the Elements of an American System of Public Economy.— 
A System of Universal Education may not at first Produce Examples of the highest 
Culture. — The American System gives Equal Chances to All. — System of American 
Schools and Colleges. — A Protective System of Public Economy indispensable to the 
American System of Education. — Education and Virtue Concomitants in a Nation. — 
Comparative Condition of European and American Population. — Physical and Moral 
Education makes the Difference. 

CHAPTER Xn. — Protection not Restriction, but Emancipation, .page 180 
What is meant by a Restrictive System. — It is a Misnomer as applied to Protection. — 
Free-Traders and Protectionists in the United States are both after the same thing. — 
The true Relation between Capital and Labor. — The most perfect State of Society — 
Capital is Labor in Repose. — Protection of Capital is the Protection of Labor.— An 
American Protective System a Rescue from a Foreign Restrictive System. — American 
Labor can not be free, without Protection. — The Protection of one American Interest 
can never injure another American Intere.st, but benefits all. — Examples and Proofs. — 
The Position of American Capital and Labor in Relation to Foreign Capital and Labor 
Consideration of the Maxim that a Nation must buy in Order to sell. — The Prosperous 
and Rich buy and trade most. — Protection makes us rich ; the want of it makes us poor. 
— A Rule for one Nation may be bad for another. — Why does Great Britain preach 
Free Trade ? — Adam Smith began right, and ended wrong. — He leaped to his Concla- 
Bion from False Premises. 



CONTENTS. 11 

CHAPTER XIII.— Money page 189 

Barter, its Nature. — Origin of the Name, "Precious Metals." — How Gold and Silver came 
to be used as Money. — Gold not used as Money in all Parts of the World. — Relative 
Proportions of the Precious Metals employed as Money and for other Purposes. — Foun- 
dation of the Value of Gold and Silver, when used as Money. — Turgot, Say, M'CuUoch, 
and others, on this Point. — The Foundation of the Value of Money lies in the Demand 
of the Precious Metals for other Uses. — It is a Foundation in Nature, not the Result of 
Convention. — Definition and Functions of Money. 

CHAPTER XIV.— Money page 203 

The Distinction between Money as a Subject and as the Instrument of Trade. — Review 
of the Doctrine of Adam Smith and others on the Relative Position of Money and of the 
Commodities given for it. — Adam Smith versus Adam Smith. — Price the Attribute of 
Commodities, not of the Money given for them. — Smith and Others on this Point. — Error 
and Confusion of their Doctrine. — Weight the Measure of Money, and not the Commod- 
ities for which it is exchanged.— Professor Twiss' " View of the Progress of Political 
Economy, since the I6th Century."' — Mr. Twiss meets the Point, and puts all at Stake. 
— Examination of his Position. 

CHAPTER XV.— Money as the « Tools of Tbade" page 223 

An Illustration of this Truth. — The Condition of a Nation, after selling its*" Tools of Trade," 
the Same as that of a Mechanic who does the same Thing. — Montesquieu's Doctrine on 
this Point. — The Emperor of Russia investing in French Stocks. — Money but an incon- 
siderable Fraction of a Nation's Wealth. — To answer its Purposes, Money should be to 
a Nation as a fixed Capital. — It is " Tools." — Half a Set of '^Tools'' not as good as a per- 
fect Set. — Money the necessary Means of a Nation's Wealth — The Amount required by 
a Nation, depends on its Resources and Capabilities. — The Charge of a Miser Spirit on 
Protectionists considered.— Bad Economy to hoard up Money. — The Commercial Revul- 
sions in the United States always owing to the Want of Money as " Tools of Trade." — 
A Protective System necessary to keep on hand " Tools" enough.^— There has never yet 
been Money enough in the United States for the Business of the People. — Money makes 
the Mare go. — To have Money enough, as " Tools of Trade," is Evidence of Private 
and Public Economy. — Ignorance the Parent of Free Trade in the United States. — The 
Precicius Metals are to Society equivalent to a Law of Nature. — Mr. Jacobs on the Uses 
of the Precious Metals. — The Quantity of the Precious Metals required for the Trade of 
the United States. — The Commercial Troubles of this Country owing to unfortunate and 
fitful Changes in the Policy of the Government. 

CHAPTER XVI.— Paper-Money and Banking page 240 

The Principle of Credit— The United States built up by Credit.— Gold and Silver a Credit 
Currency. — Is Bank-paper Money? — The Invention of Paper-Money a great Advance 
in Civilization. — Facts to illustrate its Economy and Necessity. — It greatly augments the 
Facilities, Scope, and Powers of Commerce. — Facts and Authorities to this Point. — 
Banking the Instrument of Paper-Money — The American System of Banking — Prin- 
ciples and Benefits of Banking.— Adam Smith's Doctrine that Paper-Money banishes 
Sfjecie, not applicable to the United States. — The Precious Metals the only sound Basis 
of Banking — The visionary and unsettled Opinions of European, particularly British 
Economists, as to the Basis of Banking.— Sir Robert Peel right at last in his Bill of 1844. 
— A Government Bank necessarily in a false Position. — The Subtreasury a Government 
Bank. — Treasury-Notes are Post-Notes. — All the Functions of the Treasury, by making 
it a Government Bank, merged in that Bank — The Effects, Danger, and Power of this 
In.stitution — It subverts the Banking System of the Country. — The Instincts and Propen- 
' sily of the Federal Government for Banking, as illustrated in the Subtreasury. 

CHAPTER XVII. — The Gain of Individuals not always the Gatn of the 
Community page 260 

Views of Free-Trade Economists on this Point. — M'CulIoch's View of Capital as formed 
out of Profits. — M'CulIoch's IJobby. — The Doctrine of Equivalents in Trade considered. 
— Equivalents in Kind. — Money, as " Tools of Trade," not an Equivalent in Kind. — How 
this afiectsthe Doctrine of Free Trade. — Difierenc'j, economically, between Importations 



12 CONTENTS. 

for Consamption of Value, and Importations to be improved in Value or otherwise nsed 
for Increase of Wealth. — The Values added to the raw Material by manufacturing.— 
Every Commercial Transaction independent. — Answer to some Points made by M. Say. 

CHAPTER XVIII.— Labor page 274 

Definition. — Who are Laborers. — Labor is Capital. — The Effect of not recognising this 
Fact in Public Economy. — The False Position awarded to Labor by the Economists. — 
The Position which they themselves occupy False. — Labor Capital vested in Man him- 
self, and estimated by his Life and Powers. — Labor-Capital reproduces itself indefinitely. 
— It is the Parent of all other Capital. — It is more Profitable than any other. — It is the 
Gift of God, and Inalienable. — The Machinery of Society is its Product, which reacts to 
give it Value. — Labor-Capital may be under Restraint, in Certain Circumstances. — La- 
bor the Source of all Wealth, by creating all Commercial Values. — Labor bound to share 
in the Burdens of Society and entitled to Protection. — Labor in its True Position, 
defines Human Eights. — The Perversion and Abuse of those Rights, owing to its False 
Position in Public Economy. — -The Results of the American Revolution put it in the right 
Place — Labor Man's Honor, nqt Disgrace. — It is the great Political Element. — Labor 
Discovered and made America. — American Independence, Labor's Jubilee. — Its Conse- 
quences. — " Rent," as practised in Europe, created Classes. — Labor considered as the 
Agent of Power, and as an Independent Agent. — The former Slavery, the latter Free- 
dom. — The First the State of Labor in Europe, the second its Condition in the United 
States. — The Malthusian Theory, as it justified European Economists and European 
Society, in enslaving Labor. — The Theory a Blasphemy. — This Problem solved in 
America. — Origin of the term Landlord, with its Lesson. — Labor, to be Free, must have 
an Alternative in another Chance besides the Wages offered. — Europe does not afford 
that Chance, America does. — Political Chances of American Citizens. — Causes and Ef- 
fects of the Difference in the Value of Labor and Money, in Europe and America. — 
The Power and Aims of Governments which oppress Labor. — The Intere^^ts of Civi- 
lization vested in Labor. — The Rights of Labor, Political. — The Rights of Labor the 
Strife of the Age. — The Pivot on which it turns. 

CHAPTER XIX. — The DirrERENCE between the Cost of Money and Labor 
IN Europe and their Cost in the United States, as it affects Public 
Economy for the United States page 295 

The comparative Prices of Labor in Europe and the United States. — These Prices deter- 
mine the Value of Money and other Capital in these two duarters. — Money worth 
more than other Capital. — Its Value in any Country, and at any given Time, determined 
by the Rate of Interest. — Some Account of the Rates of Interest in different Countries, 
and at different Times. — The Average Interest of Money in the United States, as com- 
pared with the Average in Europe. — Difference in the joint Cost of Money and Lahor 
in these two duarters. — Different States of Society the Causes of this Difference. — The 
Greatness of the Power acquired in Europe, by the Wrongs to Labor. — The practical 
Importance, in forming a System of Public Economy for the United States, of consid- 
ering the Difference in the Cost of Money and Labor in Europe and America. — ^A 
Commercial Principle lies at the Bottom of this Difference, and controls Results. 

CHAPTER XX. — The Claims of American Labor for Protection. page 302 
Difference in the social Position of Labor in Europe and America. — It is a Commercial 
Principle, that requires the Protection of American Labor, and therefore imperative. — 
The Rule of graduating Protection. — How Foreign Policies bear on the vulnerable 
Points of the United States. — British Free Trade a Protective Policy. — The Abatement 
of Duties in Great Britain requires Increase, rather than Diminution, in the United States, 
because it is made for Protection. — Importance of Skill in Public Economy, to Amer- 
ican Statesmen. — The Advantages of Free Labor over Slave Labor. — European Labor 
in a like Position with Slave Labor. — The best Rule for Protection is, that they who 
ask for it, should have it. — Adam Smith's Argument for Free Trade, is One for Protec- 
tion. — He concedes and begs the duestion. — Adam Smith and Daniel Webster, as to the 
Effect of increased Investments of Capital in producing Establishments, on Labor, and 
on the Profits of Capital. — TheUnitcd States can nevei^dispense with Protection, so long 
as Money and Labor here cost more than elsewhere. — The Cry of " Monopoly." — Dem- 
agogues. 



CONTENTS, IS 

CHAPTER XXI.— Balance of Trade page 322 

The Balance of Trade a well known Principle in common Life. — The Efforts made to 
mystify the Subject. — Adam Smith and his School admit the Principle unawares. — The 
only Difficulty is an imperfect View of the Facts that belong to the Cluestion. — The 
Difficulty in England not found in the United States, and is now removed there. — Prac- 
tical Men always Right on this Subject. — Instance the London Times. — Adam Smith's 
" Wherewithal."— The Free-Trade Economists fail to distinguish between Money as a 
Subject and as the Instrument of Trade, in all their Reasonings on this Cluestion. — Adam 
Smith lets the Cat out of the Bag, by an Hypothesis.— The Key of this Hypothesis.— Ad- 
am Smith makes Loss Evidence of Gain. — Joshua Gee's Position and Reasoning as a 
British Economist. — He the British Oracle. — His Policy for America. — The Coinage of 
a Nation Evidence of its Profitable or Unprofitable Trade. — M. Say's Reasoning on the 
Balance of Trade. — Its Absurdity. — Adam Smith the original Author of this Fallacy. — 
How One rides a Hobby. — A Citizen may be enriched by the same Act that subtracts 
from the Wealth of the Nation.— ^So of a Class of Citizens. 

CHAPTER XXII. — The Mutual Dependence of Agriculture, Manufac- 
tures, AND Commerce page 342 

These three are a natural Family of Interests in the United States. — Agriculture alone 
subjects a Nation to Dependence. — Adam Smith on this Point. — Adam Smith and his 
School have furnished the best Refutation of their own Errors. — An Argument on the 
indissoluble Connexion between these three great Interests. — The " Mercantile and 
Agricultural Systems," as defined by Adam Smith and others, considered. — There is no 
Foundation for this Array of these two Systems, as opposed to each other, and made so 
much of by some of the Economists. — The Importing Merchants favor Free Trade. — 
Smith's and Gee's Description of this Class of Traders. — The Independent Position of 
every Commercial Transaction. 

CHAPTER XXIII.— Protective Duties not Taxes page 351 

The Gain of Assumptions, without Proof, to one Party, and the Loss to the other by con- 
ceding them. — The whole Controversy turns on the Proposition of this Chapter.— Popu- 
lar Instincts on this Subjeet. — Duties not the Cause or Measure of a Change in Prices. — 
The vast and comprehensive Spheres of Influence which bear on this Cluestion. — How 
they all tend to prove that Protective Duties are not Taxes. — The Causes Abroad and 
at Home, which produce the Effect. — A Protective System adequate for all Purposes 
of Public Revenue in the United Stales. — The Commercial Position of the United States 
will, for an indefinite Period, require Protection. — An Array of Facts to establish the 
Proposition of this Chapter, with Comments. — Reasons of the Facts. — The great Misfor- 
tune of conceding, in the Technical Use of Language, that Protective Duties are Taxes. 

CHAPTER XXIV. — An American Protective System a Rescue from For- 
eign Taxation page 381 

The Method and Rule of this Argument, as laid down by a Public Document and Joshua 
Gee. — A Showing, from the Principles of this Rule, and by Public Documents, of the 
Foreign Taxation which the People of the United States have been and are still sub- 
jected to. — Adam Smith's and MCulloch's Evidence on this Point. — Taxes of Foreign 
Nations, of whom we purchase, enter into the Prices of their Products to us. — The Prin- 
ciples of the Tariff of 1846, as they bear on this Point. — Returns of British Commerce 
as compared with those of the United States. — The Aggregate of Foreign Taxes paid 
by the United States since 1791. — A Protective System the sure and only Way of Rescue 
from Foreign Taxation. 

CHAPTER XXV. — Gains of Protection and Losses by Free Trade, .page 397 
The everlasting Objection. — The Charm of Hypothesis, as compared with the Inductive 
Mode of Reasoning — How things look at a Distance. — Supplication of Europe to 
America. — St. George's Spear in the Throat of the Dragon. — The Aggregate Loss to the 
United States, since 1791, for Want of a Protective System. — The Loss comprehends 
the Use of the Capital in all Time. — The Effects of new Arts and new Pursuits under 
a Protective System. — A Variety of Facts on this Point. 



14 CONTExNTS. 

CHAPTER XXVI. — The Effects op a Protective System on the Prices of 
American Labor page 410 

Consideration of the contradictory Averments on this Point. — The Facts of the Case — 
Statistics bearing on the duestion. — The Effect of Low Wages on the Character of the 
People. 

CHAPTER XXVn. — The Effects or a Protective System on the Interests 
OF Agriculture page 418 

Not true that Agriculture has no Share in the Benefits of a Protective System. — Facts and 
Stati.-tical Evidence on this Point. — Breadstuff*, in ordinary Seasons, cheaper in Europe 
than in the United States. — The Effect of Indirect Protection of Agriculture — Protec- 
tion of Slave grown Staples — Slave Labor in the United States needs Protection more 
than Free Labor. — All Nations can and intend to supply their own Mouths. — Great 
Britain the greatest Exporter of Agricultural Products, of any Nation in the world — 
Evidence of William Brown, Esq., on this Point. — The Importance of this Fact in a 

" Sy.««tem of Public Economy. — Statistics showing that Europe is Independent of the Uni- 
ted States for Breadstuffs. — The Problem as to whether American Indian Corn will find 
a permanent Market in Europe. — European Agricultural Labor will always beat Amer- 
ican Agricultural Labor in Market, because of its Low Price. — The Effect of a Protec- 
tive System in sustaining and raising Prices of Agricultural Labor and Products. — 
Showing of the Effects of certain Items of the Tariff of 1846 on the Interests of Amer- 
ican Agriculture. 

CHAPTER XXVIII. — The Effects of a Protective System on the Inter- 
ests OF Commerce and Navigation page 441 

Departments of Lnbor interested in Navigation. — Ship Builders, Mechanics, and Sailors, 
all require Protection. — Ship-Owners require it — What would be the Effects of abol 
ishing our Navigation Laws — Navigation and Commerce two Interests. — Statistical 
Proofs of the different Effects of Free Trade and Protection on these two Interests. — 
The Position and Interests of Importing Merchants ho.stile to the Interests of the Coun- 
try. — Statistics continued, with a Variety of Facts, mixed with Doctrine. — Commercial 
and Reciprocity Treaties all bad, as proved by Experience. — Reciprocity necessarily em- 
bodies the Principles of Free Trade — Foreign Commerce, under a Protective System, 
may be made to supply all the Wants of Government, without taxing the People. 

CHAPTER XXIX. — The Effects of a Protective System on the Home 
Trade page 467 

The Home Trade the Basis of the Fortunes of the Country — '• Agriculture, Manufactures, 
and Commerce," the American Coat of Arms — Home Trade has always made the For- 
tunes of all great Continental Nations — Insular Nations an Exception. — The Domestic 
Resources of the United States incalculable. — We have all Climates deemed good, and 
all Physical Elements of Wealth — The Country and the People fitted for each other •:— 
The Country a World in Itself. — Care. Work, and Frugality, at Home, the same for a 
Nation as for a Private Individual. — " Far-Fetched, dear Bought." — Home Trade does 
not diminish, but enlarges the Amount of Commerce, as ten Miles is only Half of Twenty, 
and can be gone over twice for once of the latter.— The thriving Man works on his own 
Estate. — Difference in Results of Trade between Parties to a Nation and Nations as 
Parties. — The Comparative Amount of Home and Foreign Trade. — Statistics. — Amount 
of the Products of Labor in the Country. — Amount of Internal and Coasting Trade. — 
Statistics. — Adam Smith on Home Trade. 

CHAPTER XXX. — The Effects of a Protective System on the Cotton 
Growing Interest page 481 

The Reasoning of a Secretary of the Treasury, on the Cotton-Growing Interest, consid- 
ered. — The Importance of this Interest as compared with others. — The "Forty-Bale 
Theory." — A VaA-iety of instructive Statistics on the Cotton and other Interests of the 
Country. — The Claims of the Cotton Interest, as being one of superior Political impor- 
tance, examined. — The Profits of Cotton Growers and Manufacturers compared. — The 
Evidence of Mr. Clay and the " Southern Planter" on this Point. — Table of Prices of 



CONTENTS. 15 

Cotton from 1790 to 1844. — A Protective System more important to the Cotton-Growing 
Interest than to any other. — A remarkable and decisive Mode of Proof. — Action of a 
Convention of Mississippi Cotton Planters on the Subject 

CHAPTER XXXI. — The Principles of a Tariff At they respect the Ob- 
jects OF Duties and the Modes of Collecting them page 502 

An American Economist of the present Time exposed to the Charge of Political Partisan- 
ship. — He is obliged to examine public Measures as Facts. — The Principles of the 
" Revenue Standard" examined. — A Tariff not a Revenue Measure, except inciden- 
tally. — The Customhouse System inconsistent with Free Trade. — Direct Taxation and 
Free Trade go together. — No such Thing as Incidental Protection. — Minimum Dnties 
and their Effects.— Specific Duties. — Ad Valorem Duties. — History and Effects of these 
Different Modes of Duties. — Proofe in Point. 

CHAPTER XXXH.— The Tariff of 1846 page 516 

The Tariff of 1846 a Surrender and Abandonment of the Principles of Protection. — Popular 
Instincts on this Subject.— It takes Years for the Proof of a new Tariff Policy. — 
Probable Result of the Tariff of 1846.— A Table showing the Effects of the Tariff of 
1846 on American Labor and Arts. — Remarks upon this Table. — The Effect of Auction- 
Sales of Imports on American Labor and Trade. — Importance of harmonious Legisla- 
tion between Federal and State Authorities for Auction of Imports. — The Discrimina- 
tions of the Tariff of 1846 against American Industry and Labor. — Tables in Proof- 
Object of the Anti-Com-Law League of England. — False Reasoning of Free Trade 
on the Effects of the Famine in Ireland and of the short Crops of Europe. 

CHAPTER XXXni. — The Contingent Destiny of the United States.. 530 

The Contingencies of Free Trade. — Review of our Commercial History, as it discloses 
Contingencies. — What makes a Sound Currency. — As a Man that fails frequently in 
Business can not get rich, so neither can a Nation. — The possible Destiny of the Country, 
under a Protective System, grand and glorious.— Free Trade devours All, and then eats 
up Itself. 



PUBLIC ECONOMY. 



FOR 



THE UNITED STATES. 

CHAPTER I. 

PRELIMINARY REMARKS. 

The Task attempted in this Work. — The Doctrine of Free Trade Economists not a Science. 
— This false Pretension a Stolen Shield. — On common Ground, Free-Trade Economists 
have done some Good. — This Work a System for the United States. — The New Features 
of this Work not Novelties. — The proper Functions of Hypothesis. — Free-Trade Econ- 
omists have made an unjustifiable Use of Hypothesis. — It leads to no Result. — Mill's, 
Comte's, Newton's, and Reid's Views of Hypothesis. — Reasons for the limited Scope 
of this Work. — Reasons for changing the name of the General Subject. — Politics and 
Political Economy. — The Comprehensiveness of this Work, and the Unity of its Plan. 

It will be seen that the author of this work has had to confront 
authorities of no mean consideration — authorities which, strange 
as it may seem, have occupied the theatre of debate on the leading 
topic of these pages, for nearly a century, without ever having been 
encountered, face to face, in their main positions. { It has been 
claimed for thehi, that they 6ould not be answered ; that they had 
settled the question ; and that, henceforth, time only was required 
to establish the universal triumph of Free Trade..' 

Though facts, in abundance, had been arrayed against these pre- 
tensions, nevertheless they seemed still to command attention and 
respect, j The doctrine of Free Trade had taken up the position, and 
asserted the prerogatives, of a science, composed, in all that be- 
longed to it properly, of uniform propositions in all places, and in 
all time ; from the deductions of which, conceding the claim, there 
was no appeal. But its claim to be ranked among the sciences^ 
was a stolen shield. So long as such a weapon of defence was 
2 



18 PRELIMINARY REMARKS. 

awarded to it by consent, it was impossible to reason with or against 
it, inasmuch as a deduction of science is justly regarded as too for- 
midable for oppugnation. No other answer was required from them, 
except this : It is contrary to the theory. The theory, averred to 
be a science, was the charm that dissolved all arguments — the 
stronghold within which a retreat could always be covered. But 
this claim will be found to be untenable ; and divested of this, there 
is nothing left to it but certain loose reasonings, in the shape of em- 
pirical laws — nothing but the ingenious fabrications of great abili- 
ties, based on hypotheses, and forced into currency by the authority 
of great names. 

The author of this work has no objection to the use of the term 
science in this application ; nor does he deny, but on the contrary 
maintains, that the elements of public economy embody the mate- 
rials of a science of a very high order and of great importance. Bui 
it is one thing to have the elements of a science in hand, and an- 
other to have constructed the science. Nor do we mean by this to 
admit, that the Free-Trade economists have the elements ; it will ap- 
pear in the next chapter that they have not. We have there marked 
the distinction between empirical laws and those of a science, and 
shown that the doctrines of Free Trade are composed entirely of the 
former. By arrogating the name and authority of a science for 
their dogmas, the Free-Trade economists had interposed an effectual 
bar to investigation by scientific rules, and covered themselves with 
an impenetrable shield, in the presence of all who conceded the 
claim. It will be found, that the ejection of these pretenders from 
this stronghold, opens the whole field anew to fresh explorations, 
and that the old charts, proved to be erroneous in very important 
particulars, must be used with extreme circumspection. It is not 
denied, that the European economists of the Free-Trade school hav^ 
done some service, where they were at home, in a field directly 
under their eye ; or that they have recognised and settled princi- 
ples which are common to all parts of the world, and to every state 
of society. But it is not allowed, that they were competent to lay 
down rules for countries and states of society with which they had 
no acquaintance, and of the peculiarities of which they had not the 
faintest conception. 

With these views of the standard lights of a science, "falsely so 
called," the author has endeavored to construct a system of econo- 
my for the United States, and to show wherein the principles of 
European economists are entirely inapplicable here. He has not 



PRELIMINARY REMARKS. 19 

taken up new positions, or started fiom new points, or said new 
things, merely for the sake of novelty. He has availed himself of 
helps, where he could find them ; but he has been forced to exe- 
cute his own conceptions, and to carry out his plan, independent 
of all authority. Yet scarcely a thought will be found within these 
pages which has not been common property with many minds, and 
which the intelligent reader will not probably recognise, though it 
should be the first time he ever saw it reduced to form, and ad- 
justed in a satisfactory place. So far is the author from being am- 
bitious to produce surprise, that he w^ould think his labor lost, if he 
had done so. He that advances things entirely new, and before 
unthought of, on a great theme, though they be true, is probably 
doomed to pass from the stage before they will be appreciated. 
Feeling the present importance of his subject, the author has de- 
sired to be understood and appreciated now — at first sight; and 
he has, therefore, studied not to make statements which would re- 
quire study in others. He does not believe in the usefulness of 
anything on this subject, which is not, to a very great extent, com- 
mon property, as the result of unavoidable experience and observa- 
tion. He does not consider, that what he has done that may appear 
to be new, is really new in most men's minds ; but only in works 
of this kind. The very ground of his rejection of all models and 
authorities coming in the way of his convictions, is that of his con- 
fidence in the common sense of mankind, above which he would 
not willingly soar, and beyond the range of which he would not 
venture, so long as he desires to be useful. 

The author has been forced to^ observe, that hypothesis is the 
beginning, the middle, and the end of the reasoning of Free-Trade 
economists ; that is to say, they have no other proof of the truth 
of their doctrine, than its assumption. This being a very im- 
portant point, it is proper here to say a few words on the nature 
and functions of hypothesis, in scientific investigations. " An 
hypothesis," says John Stuart Mill, in bis system of logic, " is 
any supposition which we make, in order to deduce from it con* 
elusions in accordance with facts which are known to be real. . . 
There are no other limits to hypothesis, than those of the human 
imagination. . . Hypotheses are invented to enable the deduc- 
tive method [of reasoning] to be earlier applied to phenomena. 
In order to discover the cause of any phenomena, by the deductive 
method, the process miust consist of three parts : induction, ratio- 
cination, and verification. . . Now, the hypothetical method 



20 PRELIMINARY REMARKS. 

suppresses the first of these three steps, to wit, induction, and 
contents itself with the other two operations, ratiocination and ver- 
ification ; the law which is reasoned from being assumed, instead 
of ^rovedy 

Doubtless, the hypothesis of Free Trade would be entitled to the 
position of a theory or science, if, by the force of its ratiocination, 
it had ever arrived at the end in view, or at the third step above 
stated by Mr. Mill, to wit, verification. But here is the point 
where it always fails, and, therefore, remains in statu quo, an 
hypothesis still ; or, rather, is actually disproved by a counter 
verification, in the same manner as the earlier hypotheses of the 
laws of the solar system, and of the material universe, have been 
disproved, by the verification of other and more correct hypotheses. 
Hypothesis is worthy of no respect, except as it is verified by 
facts. It may be admitted, transiently, for a purpose ; but when 
the purpose fails of verification, it falls to the ground; and when 
a counter verification is made out, it is disproved. Such has been 
the result in the trial of the hypothesis of Free Trade. 

"It appears," says Mr.Mill, above cited as the latest and best 
logical authority, " to be a condition of a genuinely scientific hy- 
pothesis, that it be not destined always to remain an hypothesis; 
but be certain to be either proved or disproved by that comparison 
with observed facts, which is termed verification. ... If the 
supposition accords with the phenomena, there needs no other 
evidence." 

The substance of M. Comte's reasoning on this point — and 
he is allowed to be one of the greatest philosophers of the age — 
is, that " we arrive, by means of hypothesis, to conclusions not 
hypothetical." This is the true and only legitimate function of 
hypothesis in scientific investigations, and when the third step of 
the deductive method fails, to wit, verification, which is the only 
object, and the only justification of assuming the first, in the shape 
of hypothesis, then the hypothesis falls to the ground. " It is not 
destined," as Mr. Mill says above, " always to remain an hy- 
pothesis ;" but must either be verified, which transforms it into a 
science, or part of a science ; or be rejected, for want of verifica- 
tion, as worthy of no respect. 

This is precisely the fate of the Free-Trade hypothesis, which, 
though it has never yet got any farther than the original assump- 
tion, to prove itself by itself, has been dignified with the name of a 
science. It dispenses with the syllogism altogether, without which 



PRELIMINARY REMARKS. 21 

no result can ever be arrived at by deduction. It halts for want of a 
second term in the train of its reasoning, and leaps the chasm to a 
forced conclusion. 

It is admitted, that hypothesis is a legitimate resort, as a mode 
of reasoning backwar-d from effect to cause, for the purpose of 
ascertaifjing a cause ; or rather, perhaps, we should say, in assu- 
ming a more or less remote antecedent as a law, in order to ascertain, 
by scrutiny, whether it be, in fact, a law of causation in relation to 
a given effect ; and that, in this way, some of the most important 
truths in science, as in astronomy for example, have been estab- 
lished. One of the earliest hypotheses of the universe, was, that 
the earth rested on the back of a huge elephant, and that the ele- 
phant stood on the back of a great tortoise. This is an hypothesis ; 
and if the facts observed had been found, on scrutiny, to agree 
with it, it would have stood. Another later hypothesis was, that 
the sun and heavenly bodies move around the earth every twenty- 
four hours. Next to that was discovered the true hypothesis, viz., 
that the earth turns daily on its own axis. This agrees with ob- 
servation of facts; in other words, is verified, and has, therefore, 
been sustained. Sir Isaac Newton invented a series of hypotheses 
by which the laws of gravitation, and other phenomena of the 
universe, were verified, as now received in science. Hence a 
perfect and scientific theory of the material universe. Such is the 
use and intent of hypothesis, viz., to arrive at the cause of an effect, 
and at the laws by which effects are controlled. In this way hy- 
pothesis ministers to the ends of science. But to stop at hypothesis, 
and call it science, as the Free-Trade economists do, is precisely the 
same as to claim our belief, that the earth rests on the back of an 
elephant. To erect an hypothesis, and then to force conclusions 
from it, is utterly inadmissible. Above all, when the conclusions 
are at variance with facts, the hypothesises falsified. This is pre- 
cisely the position and fate of the Free-Trade hypothesis. It stands 
alone, unsupported. This is all the authority which the doctrine 
has, and is the very reason why it should be abandoned. It dis- 
appoints the aim of hypothesis, which is to find a position to account 
for facts. When that fails, the hypothesis, however ingenious and 
beautiful to look at, is a bubble, and is worth no more. It will be 
seen, in the progress of this work, that the Free-Trade doctrine is 
precisely of this character, not in harmony, but in conflict, with 
facts ; and, therefore, that it is not simply good for nothing, but 
must prove fatal in practice. 



22 PRELIMINARY REMARKS. 

Sir Isaac Newton says : *' No more causes, nor any other 
causes, of natural effects, ought to be admitted, but such as are 
both true and sufficient for explaining phenomena." " This," says 
Dr. Reid, in his Essays, "is the golden rule. It is the true and 
proper test by which what is sound and solid in philosophy, may 
be distinguished from what is hollow and vain." Another form of 
this rule of Sir Isaac Newton is, that phenomena or facts are the 
test of an hypothesis; and this form more particularly applies to 
the argument of this work, though it can not fail to be appreciated, 
by intelligent minds, in any form. 

On this Newtonian rule, Dr. Reid remarks : " If a philosopher, 
therefore, pretend to show us the cause of any natural effect, whether 
relating to matter or to mind, let us first consider, whether there be 
sufficient evidence that the cause he assigns does really exist. If 
there be not, reject it with disdain, as a fiction which ought to have 
no place in genuine philosophy. If the cause assigned really exist, 
consider, in the next place, whether the effect it is brought to 
explain, necessarily follows from it. Unless it have these two 
conditions, it is good for nothing." 

Sir Isaac Newton would not venture on hypothesis beyond what 
could be proved by facts, or presume to assert on mere hypothesis, 
the cause of gravitation, or the cause of a cause he had discovered. 
He says : " The reason of these properties of gravitation, I have 
not been able to deduce from phenomena ; and I am not a fabricator 
of hypotheses. Hypotheses, whether in metaphysics, or physics, 
or mechanics, or occult qualities, have no place in experimental 
philosophy ;" that is, as unverified rules. Much less should mere 
hypothesis be permitted to decide questions in public economy. 

Some persons may, perhaps, at first sight, think it was unneces- 
sary to carry this debate through an entire work on public economy. 
But it will be found, that there is no interest of the country, or of 
any section of it, or of any party or person in it — the merchant 
engaged in foreign trade, perhaps, excepted — to which an Amer- 
ican protective system, is not vital ; and even the merchant, adapt- 
ing his business to such a system, when once established, would 
find it to be more for his advantage in the end, as shown in this 
work. Anything that does not come within the range of this de- 
bate, is believed by the author to be of no material consequence in 
a system of public economy for the United States, and although 
there are many details of the system, not specifically brought under 
consideration in this work, all of any importance are comprehended 



PRELIMINARY REMARKS. 23 

in the questions discussed. It would require volumes to make a 
perfect work on this subject. In the author's view, there was an 
exigency of the time — an exigency produced by nearly a century's 
growth of systematic error, which will, perhaps, require an equal 
period to dissolve and dissipate it — ah exigency which might well 
absorb a far more extended effort than the one now submitted, and 
talents of an order and power- to which the author can make no 
pretensions. To meet this exigency is the main design of this work. 
We have not rejected the usual title of ^'■'political economy" in 
application to this work, and to the general subject, because we 
proposed to enter a different field ; nor because the topic and argu- 
ment have no relation to political society ; but, chiefly, because the 
term, " political," has been so much lowered, in this country, by 
the rude agitations of what are commonly called " politics," that 
we do not think the term now so well comports, among us, with 
the dignity of our theme, as it did generally throughout the world, 
when first employed in this application. It is, therefore, in part, a 
matter of taste, that has led us to this partial change of name for 
such a work and subject; though, we think, it will be found to be 
a felicitous change in other respects than that of being a rescue 
from associations not always pleasant. The word, " public," is 
the exact counterpart of the word, " private ;" and, it is beheved, 
that one can not have proceeded far in this work, without feeling, 
that there is a much greater fitness in the use of the former term, 
than ^^ politicalf^* in such an application, because, in no case, will 
there be a sense of incongruity, when the former is thus employed ; 
whereas, this feehng will frequently arise in such an application of 
the latter. It is chiefly " 'public'^ economy with which we have 
to do, in a work of this kind ; and if it is also "political," in some 
respects, it is not, perhaps, unqualifiedly so ; or allowing even that 
it is, still objections lie against the latter, on account of its frequent 
prostitution to violent debates and low controversies, which can 
never lie against the former. M. Say protests seriously and ear- 
nestly against a necessary connexion of " politics" with " political 
economy ;" and gives for reason, that " wealth is independent of 
political organization." We think, however, his protest is without 
foundation, and his objection without force. The economist is the 
school-master, and the statesman is the practical operator. These 
terms are correlatives, — and the latter, properly qualified, as much 
supposes a pupilage under the former, as engineering supposes an 
acquaintance with the science. 



24 PRELIMINARY REMARKS. 

But the term *' public," all things considered, is exactly the 
word for this place, always expressing and comprehending all that 
is wanted, and never suggesting an irrelevant idea. It has, more- 
over, the advantage of always expressing a relation to "private" 
economy, which, as will be found, the case requires, and which the 
term " political," does not necessarily denote, nor very naturally 
suggest. It is agreed by all economists, that the wealth of a nation 
is chiefly composed of the aggregate wealth of all its individuals ; 
and by some, this is affirmed, though we think incorrectly, without 
qualification. For example, all public property is an exception ; 
so also the means of wealth, which a nation possesses, as apolitical 
corporation, which, in some cases, are great and comprehensive, 
and may be justly styled the capital of its position. It is true, that 
all these ought to minister to private wealth, and if properly hus- 
banded, will do so. Nevertheless, they do not fall within the 
aggregate of private inventories. There is, however, always, an 
appropriate relation expressed in the apposite terms of " public" 
and " private" economy, which would not be so uniformly con- 
veyed by the substitution of the word "political," for that of 
" public ;" and the best of it is, that the term " public," in such a 
use, always conveys the idea required, as it is invariably, -in every 
practical view, the counterpart of " private." 

But there is yet a much more important and vital reason for 
using the term " public," instead of " political," in this application 
— a reason which involves a fundamental principle in the general 
argument, viz., that there can not be two kinds of economy, and 
that the principle is the same in public as in private economy, the 
former differing from the latter only in the comprehensiveness of its 
interests. The absurdity of applying one set of rules of economy 
to a given number and amount of given interests, having the same 
relations, while they are called private, because they belong to one 
person, and of applying a different set of rules, because the same 
interests belong to many persons, and are therefore called public, 
must be apparent to all. The man who, under a good system of 
economy, and beginning with one interest, has grown rich, and 
brought under his charge many interests, managing them all with 
skill, and by rules which he has, found profitable by experience, 
would be very unwise, probably would be ruined, by changing his 
system. That which he has found to be economy, is economy, 
and nothing else. He can no more alter the principle, than he can 
make right wrong, and wrong right. He is as much compelled, in 



PRELIMINARY REMARKS. 25 

his commercial relations, to one uniform course, under the same 
circumstances, in order to prosper, as in his social relations in order 
to be happy. The multiplication and diversity of his interests do 
not, in the least degree, affect his principles of economy. Besides, 
it may easily be conceived, that a single person may have even a 
greater diversity and a greater amount of interests than a state. 
Whatever is economy to him is economy to the state, and what- 
ever is economy to the state is economy to him, for given interests 
in given circumstances. And yet it will be found, that Free Trade 
prescribes a very different species of economy for the state, from 
that which all experience has prescribed to private persons. 

Some persons, probably, will think this work a very incomplete 
system, as no notice is taken of numerous topics, naturally falling 
within the range of public economy, and which are usually consid- 
ered in such works. In answer to this, the author, after pleading 
guilty to this sin of omission, would say, that he had a single aim 
in the conception and execution of his task, the accomplishment 
of which, he found, would swell it to as large a volume as might 
be expedient for such a publication, and that another of equal ex- 
tent would be required to do justice to all the topics which might 
be considered as belonging to the general subject. That aim was 
to show, as well as he could, the merits of the Protective and Free- 
Trade systems, respectively, as they apply to the United States. It 
will be found, that the author has «ever deviated from this line of 
argument. Adhering to this purpose, it will also be seen, that the 
work has a unity of plan, which is usually regarded as one of the 
most important attributes of design in all productions of art, of which 
literary composition must be allowed to be one, and not the least in 
general consideration. The author is of opinion, that the settlement, 
for the United States, of the question debated in these pages, is one 
of the most desirable, and will be one of the most important events, 
which remain to be achieved in the progress of the country ; and 
that all minor questions of public economy, arising out of our do- 
mestic condition and interests, can hardly fail to go right, if this 
goes right. He has, therefore, devoted himself to the prosecution 
of this great argument, and kept within its limits. ,As the title of 
his work proclaims, it is for the United States, considered 
chiefly in their foreign commercial relations and interests, as they 
are connected with and bear upon domestic interests. 



26 THE NEW POINTS OF THIS WORK. 



CHAPTER 11. 

THE NEW POINTS OF THIS WORK. 

What is meant by these New Points. — The First : Definition of the General Subject- 
Importance and Influence of Definitions. — Public Economy not heretofore reduced to a 
Science. — The Definition here given of the Subject is consistent with a Science. — It res- 
cues the Subject from an embarrassed Condition. — The Free-Trade Theory composed of 
uniform Propositions. — The Exact Sciences. — All Sciences, when fully constructed, are 
necessarily exact — Science appertains to all Subjects. — The Science of Sociology, as 
announced by M. Comte's in an imperfect State. — John Stuart Mill's Definition of Sci- 
ence. — Why the Science of Sociology is Imperfect. — Mr. Mill, a Free-Trader by Sym- 
pathy, has demolished the Theory by Logic. — Citations of a remarkable Character from 
Mr. Mill. — What they prove. — Private and Public Economy compared. — Napoleon on 
this Subject. — Common Principles in Systems fundamentally different. — How our Defi- 
nition affects the General Argument. — Empirical Laws defined. — Public Economy, down 
to this Time, lies scattered over the Field of Empirical Laws, and has not been reduced 
to a Science. — The Free Trade Hypothesis belongs to a Category of Empirical Laws 
incapable of being reduced to a Science. — The recognised Canons of Experimental In- 
duction, as laid down by Logicians, fully sustain the Claims of Protection against those 
of Free-Trade, and install the Former in the Position of a Science. — ^How to apply these 
Canons to this Subject. — A Science can not be made out of the Laws of Public Economy, 
except for one Nation, each by Itself. — The True Position of Labor. — Labor robbed of 
its Rights by a False Position in Public Economy. — Protective Duties not Taxes in the 
United States, and a Re.scue from Foreign Taxation. — How Public Economy is affected 
by different States of Society. — New Points in regard to Money and a Monetary System. 
— The Reasons for Free Trade, with the People, are Reasons for Protection. — The In- 
stitution of Property. — The Destiny of Freedom not yet achieved. — The Protective Prin- 
ciple identical with that of the American Revolution. — Free Trade in Great Britain not 
based on Science, but on Public Policy. — Rise and Progress of the Free-Trade Theory. 
— Definition of Freedom — An American System of a Peculiar Character. — Free Trade 
identical with Anarchy. — Protection can never be dispensed with, in any supposable 
Perfection of American Arts. — Agricultural Labor and Products in the Guise of Manu- 
factures. — Not two Kinds of Economy. 

By the new points of this work, it is not meant, that all specified 
as such are entirely so, though many of them are ; but, on account 
of the importance given to their position, as compared with the 
slight notice taken of them in other works of this kind, it is thought 
proper to present them as new. Many of them, as will be seen, 
involve fundamental and all-pervading principles, such as have not, 
heretofore, been incorporated in works on public economy. The 
announcement of a few of the most prominent of these points, in 
this place, may, perhaps, serve the purpose of suggesting what in- 
fluence and effect they are entitled to have on the general argu- 
ment. 

1. The first we would notice is our definition of the subject : 
/ Public economy is the application of knowledge derived from experi 



THE NEW POINTS OF THIS WORK. 27 

ence to a given position, to given interests, and to given institutions 
of an independent state or natron, for the increase ofpuhlic and pri- 
vate wcalthj^ 

In all scientific investigations, definitions discharge the functions 
of a finger-post, of a door of access to the field, of marking the 
boundaries of that field, and of a glance view of the whole ground 
The definition is the controlling law of the debate or of the scru- 
tiny. There are no essential attributes of the argument, which are 
not comprehended in it, or suggested by it. With th6 definition as 
a guide, if it be a correct one, it is impossible to get out of the field. 
On the contrary, if it be incorrect, it is impossible certainly to know 
when one is in the field. It is the text of the subject and the rule 
of the argument. To err in a definition is a necessary doom to 
perpetual and endless error in all that grows out of it ; to be right 
in this start, is the only sure guide to a right end. 
/The above definition is the fruit of the study of years ; and for 
the present we do not know how to improve it. We have tried 
our best to tolerate the introduction of the term, science, into this 
definition, as the substantive part of it, in accordance with general 
usage, such as (he science of national wealth, &c. ; and we do not 
repudiate the idea that science is implied in it, or that it is a proper 
subject of science. But we are forced to deny, that, as yet, the 
subject has ever been reduced to a science, and that, down to this 
time, it has any other form of a system than a collection of what the 
logicians call empirical laws, the character of which will be noticed 
by-and-byJ If it shall be admitted, that we have contributed, in 
any degree, so to sift these empirical laws, and so to adjust them 
in a scientific form, as to subject them to recognised canons of ex- 
perimental induction, as we propose to attempt to do, still our defi- 
nition stands in a form not inconsistent with the definition of a 
science ; and though we fail in our proposed task, the purpose of 
our definition is not Tmpaired. Its terms indicate sufficiently the 
class of sciences among which it must take rank, if it is deemed 
worthy to be called a science. It is a science composed oi contin- 
gent propositions — contingent on the peculiar position, the peculiar 
interests, and the peculiar institutions of the country to which its 
rules are applied at any given time, and contingent on the changes, 
in these particulars, to which that country may be subject in the 
succession of events. 

It will be seen, therefore, that our definition is a new point, and 
that it rescues the whole subject, entirely, from the position which 



28 THE NEW POINTS OF THIS WORK. 

has been claimed for it by the Free-Trade economists, as a science 
of uniform propositions — uniform for all countries and for all time. 
Every person must see, that one of the essential attributes of Free 
Trade is the uniformity of its propositions for all nations, and that 
any departure in a system of public economy from such uniformity, 
is not Free Trade, but a violation of its principles. The poles of a 
planet, therefore, can not be wider apart, nor the heavens farther 
from the earth, than the main positions of these two antagonistical 
systems. The propositions of the one are the same for all nations, 
in all time, while those of the other are contingent on the position, 
interests, and institutions of the country to which they are applied, 
for the time being. 

We assume that we do no injustice in ascribing this position to 
the Free-Trade economists, though they have not expressed them- 
selves precisely in these terms. If they give up this, they give up 
all. Their argument avails nothing except upon this ground. If 
their science is not one of uniform propositions, in application to all 
countries, in all times, they have not only abused the public, but 
made dolts of themselves. For so the public have thought, and 
their argument is at an end if they deny it. Possibly they have not 
considered how many categories of science there are, or how dif- 
ferent some of them are from some others, and that none of them 
are exactly alike. There is a class of sciences called exact, of 
which, doubdess, the Free-Trade economists suppose theirs is one, 
or one equally reliable in its results. And if it be a science, they 
are right ; for, strictly speaking, no science can be more exact, or 
more certain in its final conclusions, than another, when all its 
elements are brought together, understood, and properly adjusted. 
But the perfection of every science is a work marked by stages, by 
degrees. That of astronomy was once very imperfect, very in- 
exact ; but it has now attained to a high degree of perfection, as 
demonstrated in the precision of its predictions. " Geometry," 
Mr. Mill says, " is a science of coexistent facts, altogether inde- 
pendent of the laws of the succession of phenomena ;" but it is a 
very exact science. The science of mechanics is exact ; for though 
the relations of forces, in all experiments, are constantly shifting, 
their results are equally measurable, the forces and relations being 
given. The mathematics are reckoned among the exact sciences, 
so far as they have advanced, and from the nature of the subject 
could not be otherwise. A vast many branches of knowledge, 
capable of being reduced to the strictest laws of science, are yet in 



THE NEW POINTS OF THIS WORK. 29 

the chaotic field of empirical laws. Science, no doubt, appertains 
to everything in nature, in man, in society, in morals, to everything 
in which man has or takes an interest ; but how much of it is yet 
in the dark ? It is probably nothing but our ignorance that makes 
the laws of one branch of knowledge less exact, and less rehable 
to us than those of another. Science appertains to tendencies, to 
analogies, to chances, to the very contingencies by which man retains 
his hold on life. Life insurance, lotteries, games of chance, and 
many other classes of facts, and combinations of facts, the issues 
of which are commonly regarded as most uncertain and fortuitous, 
are, nevertheless, based upon elements not less susceptible of 
scientific adjustment, for the attainment of the most infallible 
results, than those of any science that now boasts of the greatest 
conceivable exactitude in its predictions. 

There is the science of the social state, or of sociology, as M. 
Comte calls it, which approximates to, more properly, perhaps, 
lies behind, the science of public economy ; for it is presumed 
they will not be pronounced identical, though there is an afiinity and 
a sympathy. But this science of sociology is very difficult to 
master, in order to predict results with any tolerable success, not- 
withstanding that all its elements are vested in the individual man. 
It is because the combinations and relations of these elements, 
wherever found, are so infinitely diversified, and for ever shifting. 
Make a case — which, however, is impossible — suppose a case, 
then, where their position, combinations, and relations, are precisely 
the same as in another given case, and the results will be uniform ; 
which, if true, demonstrates that society, in its organization, move- 
ments, changes, and destiny, is governed by scientific laws, of which, 
indeed, there can be no doubt. 

" Any facts," says Mr. Mill, " are fitted in themselves to be a 
subject of science, which follow one another according to constant 
laws, although those laws may not have been discovered, nor even 
be discoverable by our existing resources." Meteorology and 
tidology are among these imperfect sciences. The science of 
human nature is of this description, as also, of man in society, or 
sociology. "If our science of human nature," says Mr. Mill, 
" were theoretically perfect, that is, if we could calculate any char- 
acter, as we can calculate the orbit of any planet, /ro7/i given data^ 
still as the data are never all given [in the case of man], nor ever 
precisely alike in difierent cases, we could neither make infallible 
predictions, nor lay down universal propositions." Nor can we 



30 THE NEW POINTS OF THIS WORK. 

make artificial experiments, in the case of man and society, as 
in the mathematical, mechanical, and physical sciences ; but we 
are always compelled to take man and society, just as we find 
them. 

As we are now approaching the main point on which our defini- 
tion of public economy is based, in confirmation of the correctness 
of our position, we would here cite a little from Mr. Mill, who, 
sympathizing with the state of society in Great Britain, is himself 
a Free-Trader. We wish to show from Mr. Mill's own words, 
that, as in sociology, so also in public economy, and precisely for 
the same reasons, no science has ever yet been constructed. Mr. 
Mill says: " There is, indeed, no hope that these laws [laws of 
sociology], though our knowledge of them were as certain and as 
complete as it is of astronomy, would enable us to produce the 
history of society, like that of the celestial appearances for thousands 
of years to come. But the difference of certainty is not in the laws 
themselves ; it is in the data to which those laws are to be applied. 
In astronomy the causes influencing the result, are few, and change 
little, and that little according to known laws ; we can ascertain 
what they are now, and thence determine what they will be at any 
epoch of a distant future. The data, therefore, in astronomy, are 
as certain as the laws themselves. The circumstances, on the con- 
trary, which influence the condition and progress of society, are 
innumerable, and perpetually changing; and though they all 
change in obedience to causes, and therefore to laws, the multitude 
of the causes is so great as to defy our limited powers of calcula- 
tion." So far on sociology. Next Mr. Mill adduces the very case 
of the general inquiry of this work, to wit, " The great topic of 
debate in the present day, the operation of restrictive and pro- 
hibitory commercial legislation on national wealth. Let this, then," 
he says, " be the scientific question to be investigated by specific 
experience. If two nations can be found which are alike in all 
natural advantages and disadvantages ; whose people resemble 
each other in every quality, physical and moral, innate and ac- 
quired ; whose habits, usages, opinions, laws, and institutions are 
the same in all respects, except that one of them has a more pro- 
tective tariff; and if one of these nations is found to be rich and 
the other poor, or one richer than the other, this will be an experi- 
mcnlum crucis ; a real proof by experience, which of the two sys- 
tems is most favorable to national riches. Bat the suiiposition^ thai 
two such distances can be met with, is absurd on the face of it. Nor 



THE NEW POINTS OF THIS WORK. 31 

is such an occurrence ever abstractedly possible. Two nations 
which agreed in everything except their commercial policy, would 
agree also in that. Differences of legislation are not inherent and 
ultimate diversities ; are not properties of kinds. They are effects 
of preexisting causes. If the two nations differ in this portion of 
their institutions, it is from some difference in their jwsition, and 
thence in their appai'erit interests, or in some portion or other of 
their opinions, habits, and tendencies ; which opens a view of 
further differences, without any assignable limit, capable of opera- 
ting on their industrial prosperity, as well as on every other feature 
of their condition, in more ways than can be enumerated or ima- 
gined. There is thus a demonstrated impossibility of obtaining, 
in the investigations of the social science, the conditions required 
for the most conclusive form of inquiry by specific experience." 

This is enough. We have here a full confession^ from a be- 
liever in Free Trade, a severe and logical argument, itself com- 
posing a pait of a system of logic, that even two nations can not be 
found enough alike to justify general deductions equally applicable 
to both in public economy ; a fortiori, that no such rules can safely 
be applied to all nations, as is claimed by Free Trade. Science, 
here, is proved to be utterly at fault for general rules. The only 
defect of this argument is the last sentence of the above citation, 
where Mr. Mill would seem to make his " demonstrated impossi- 
bility" apply also to the experience of one nation. It clearly ap- 
plies to two, and much more to an increased number ; but there is 
nothing in this reasoning to show, that a nation may not find rules 
in its own experience for itself, and rules based on scientific and 
experimental induction. Mr. Mill has not only demolished the so- 
called science of Free Trade, which assumes to give rules for all 
nations, but he has fully vindicated our definition, and shown that 
it was impossible, with propriety, to give any other. It is even 
possible that our definition should fall within the scope of a well- 
built science ; and we intend yet to show that it has some strong 
claims to that position ; while it is clearly impossible that the gen- 
eral propositions of Free Trade should have that advantage. 

A few more brief remarks of Mr. Mill will be pertinent here : 
*' The aim of practical politics is to surround the society which is 
under our superintendence with the greatest possible number of 
circumstances of which the tendencies are beneficial, and to remove 
or counteract, as far as practicable, those of which the tendencies are 
injurious^ Any one can see how directly this looks to the ex- 



32 THE NEW POINTS OF THIS WORK. 

perience of one society only for rules of its policy, and how directly 
opposed it is to general rules having no respect to such experience. 
In other words, it falls directly within the line of our definition. 
Again : " It would be an error to suppose we could arrive at any 
great number of propositions, which will be true in all societies 
without exception. Such a supposition would be inconsistent with 
the eminently modifiable nature of the social phenomena, and the 
multitude and variety of the circumstances by which they are 
modified — circumstances never the same, or even nearly the same, 
in two different societies, or in two different periods of the same so- 
ciety. . . We can never either understand in theory, or command 
in practice, the condition of a society in any one respect, without 
taking into consideration its condition in all other respects. . . 
Unless two societies could be alike in all the circumstances which 
surround and influence them (which would imply their being alike 
in their previous history), no portion whatever of their phenomena 
will, unless by accident, precisely correspond; 7io one cause luill 
-produce exactly the same effect in both. . . We can never affirm 
with certainty that a cause which has a particular tendency in one 
people or in one age, will have exactly the same tendency in 
another, without referring back to our premises, and performing 
over again for the second age or nation, that analysis of the whole 
of its influencing circumstances, which we had already performed 
for the first. The deductive science of society [here, observe, is 
the very hypothesis of Free Trade repudiated] does not lay down 
a theorem, asserting in- a universal manner the effect of any cause ; 
hut rather teaches us how to frame thejproper theorem for any given 
case [which is the principle of our definition]. It does not give us 
the laws of society in general, but the means of determining the 
phenomena of any given society, from the 'particular elements or 
data of that society. All the general propositions of the deductive 
science [such as those of Free Trade] are, therefore, in the 
strictest sense of the word, hypothetical. The hypothetical com- 
bination of circumstances upon which we construct the general 
theorems of the science, can not be made very complex, without so 
rapidly accumulating a liability to error as must soon deprive our 
conclusions [which happen to be those of Free Trade] of all value. 
This mode of inquiry [to wit, Free Trade], considered as a 
means of obtaining general propositions, must therefore, on pain of 
entire frivolity, be limited to those classes of social facts which, 
though influenced like the rest of all sociological agents, are undei 



THE NEW POINTS OF THIS WORK. 33 

the immediate influence, principally at least, of a few only. . . 
In order to verify a theory by an experiment, the circumstances 
of the experiment must be exactly the same as those contemplated 
in the theory. But in social phenomena the circumstances of no 
two experiments are exactly aHke." ' 

This, we confess, is one of the most remarkable confutations of 
the theory of Free Trade we have ever seen ; and the more re- 
markable as coming from one who believes in the doctrine. Thanks 
to his fidelity as a logician, he would not, and could not, sacrifice 
logic to a fancy of this kind. Without dreaming of this incidental 
result of such a discharge of his professional functions, he has swept 
Free Trade clean into an irrecoverable abyss. 

This point is so important in the general argument, that we are 
tempted, notwithstanding the fulness and sufficiency of Mr. Mill's 
reasonings, to add a little of our own. 

There is usually no more similarity or equality in the condition 
and interests of nations, than in those of private persons ; and the 
very necessity of a system of public economy, for any one nation, 
in its relations to others, is based upon the fact of such dissimilarity 
and inequality. If there were no diversity of interests in different 
nations, and no dissimilarity in their condition, physical or social, a 
common system of public economy might, perhaps, be equally 
adapted to all. It is the exigency, or permanent fact, of these dif- 
ferences, numerous, essential, and important, which renders systems 
of public economy — diversified as the circumstances to which 
they are applied — indispensable to all nations; and if they are 
not, in each case, adapted to these differences, and made expressly 
for them, they will not only fail of their end, but will probably be 
injurious. A system made for one nation, and adapted to its con- 
dition and interests, may be ruinous to another — will certainly be 
more or less hurtful. 

Ricardo has very well said : " That which is wise in an individ- 
ual, is wise also in a nation." We know that no two persons can 
be found, whose condition and interests are precisely similar, and 
that each must have his own rules for the management of his own 
affairs. It would be mischievous, possibly ruinous, for any two 
persons to interchange rules of private life and economy, and for 
each to work by those of the other. Nor could both work by the 
same rules. Just in proportion as the difference in the condition, 
pursuits, and interests of any such two persons, is increased, in the 
same proportion must there be a difference in their respective sys- 
3 



34 THE NEW POINTS OF THIS WORK. 

tems of private economy, or rules of business. The farmer can not 
work by the rules of a mechanic ; or of a merchant ; or of an artist ; or 
of a lawyer ; or of a doctor; or of a soldier ; nor can either of these 
work by the rules of either of the others ; and so on, through all the 
diversified pursuits of life, each one's system of economy, or rules of 
business, must be adapted to his pursuit and peculiar position and 
interests. Even those in the same calling require rules, or a sys- 
tem, adapted to the peculiarities of their respective positions and 
circumstances. The same system can not be equally beneficial to 
any two parties, whose position and interests are in any respect 
diverse. It must be seen, therefore, that, although there may be 
principles of conduct common to all persons, there can not be a 
common economical system for any two. 

In the same manner, it is impossible that a given system of pub- 
lic economy should be equally well adapted even to two nations ; 
and much more impossible, that it should be adapted to all nations. 
Adam Smith's pretension, therefore, in giving to the world his "In- 
quiry," &c., is a manifest absurdity, if the title of "the Wealth of 
Nations" be regarded as involving a proposition descriptive of the 
work, which may, no doubt, with fairness, be accepted as the inten- 
tion. It is beUeved, that he wrote for all nations, Great Britain, 
perhaps, excepted. It is certain that his system has been received 
by the world, as carrying with it this pretension. Adam Smith 
doubtless supposed, that^he was laying the foundations of a science ; 
and those of his school, such as Say, Ricardo, and M'Culloch, 
have been more open and more emphatic in their claims, and have 
not hesitated, as before observed, to rank the Free-Trade hypoth- 
esis among the sciences. M'Culloch says : " Political economy 
may be defined to be the science of the laws which regulate," &c. 
He also says : " Political economy is of very recent origin," that 
is, as a science ; and that " it was not treated in a scientific man- 
ner, till about the middle of the last century." Of M. Quesney, a 
physician, attached to the court of Louis XV., he says, that " he 
gave to political economy a systematic form, and reduced it to the 
rank of a science." Also : " We are justified in considering Dr. 
[Adam] Smith the real founder of the modern system [science] of 
political economy." 

In the same manner, all the economists of the Free-Trade school 
have imbibed the notion, and started on the principle, maintaining 
that position throughout, that their theory is a science, composed 
of uniform propositions, all the world over, and in all time. M. 



THE NEW POINTS OF THIS WORK. 35 

Say declares, in the most unqualified and emphatic terms : " The 
maxims of political economy are immutable.'' 

As there can be no doubt of the character of this claim, it is un- 
necessary to go into minute proof of the fact ; or, if it is allowed to 
be too absurd to be credited, the pretension itself is disposed of. 
All must see, that it has not a shadow of just pretence to occupy 
this position. And yet it will be found, that it was solely by its 
assumption, without warrant, and without reason, that the most stu^ 
pendous errors have been palmed upon the world, under the sto- 
len shield of science, "simply because the claim being conceded. 
or not challenged, it was vain to oppose deductions put forward 
under such authority. They claimed that the theory was scien- 
tific; nobody challenged the claim; and who would dare to oppose 
science ? Thus, for the greater part of a century, the Free-Trade 
economists have had no inconsiderable sway, it might, perhaps, 
be said, a full sweep of influence, by the authority of a false pre- 
tension. 

Observe the following remarks on this point by Napoleon, in 
his exile, as reported by Las Cases : " He opposed the principles 
of the economists, which he said were correct in theory, though 
erroneous in their application. The political constitution of differ- 
ent states," continued he, " must render these principles defective ; 
local circumstances continually call for deviation from their unifor- 
mity. Duties," he said, " which were so severely condemned by 
pohtical economists, should not, it is true, be an object to the treas- 
ury ; they should be the guaranty and protection of a nation, and 
should correspond with the nature and the objects of its trade. Hol- 
land, which is destitute of productions and manufactures, and which 
has a trade only of transit and commission, should be free of all 
fetters and barriers. France, on the contrary, which is rich in 
every sort of production and manufactures, should incessantly guard 
against the importations of a rival, who might still continue supe- 
rior to her, and also against the cupidity, egotism, and indifference 
of mere brokers. I have not fallen into the error of modern sys- 
tematizers," said the emperor, " who imagine that all the wisdom 
of nations is centred in themselves. Experience is the true wis- 
dom of nations. And what does all the reasoning of the econo- 
mists amount to ?" 

No one, probably, has lived, since public economy became a 
subject of debate, who understood it better, for practical purposes, 
than this extraordinary man. 



3b THE NEW POINTS OF THIS WORK. 

It will be seen, that our definition, including a given position, 
given interests, and given institutions of a state, as elements of 
public economy, is fully justified by what Napoleon calls " the po- 
litical constitutions of different states," and " local circumstances." 

In denying the claim of Free Trade to a science, we do not 
mean, that there can not be common principles, which, in abstract 
forms and isolated positions, are equally true all the world over, 
any more than that we mean to arraign the religious and moral 
principles of the decalogue, which, by all Christians and Jews, are 
allowed to be eternal and immutable ; or any more than we would 
question the verities of figures and mathematical demonstrations. 
But the question is, as to the application of the same principles, in 
combination or in separate form, to things, or to states of things, 
which are different from each other. There is not a principle in the 
decalogue which may not be perverted, and which, if perverted, 
will not lead to an unfortunate or criminal result. Figures them- 
selves, which are commonly said not to lie, may be employed to 
verify the most absurd and stupendous errors, by mistakes in the 
premises, or by perversity of application. 

It will be observed, that we have not only departed from usage, 
in our definition of public economy, by denominating it the appli- 
cation of knowledge derived from experience, instead of calling it 
a science ; but that we require a given position, given interests, and 
given institutions of a state or nation, in order to know how to make 
the application. The very terms of our definition, therefore, take 
the whole subject from the determinate and immutable laws of Free 
Trade, and place it on what may be called a contingent basis, it- 
self subject to a variety of contingences. In Free Trade, we have 
only to understand its propositions, and then we know what they 
prove, or pretend to prove. But in our theory of public economy, 
we consult facts, experience, under a given state of things, in order 
to form the right propositions. In Free Trade, the propositions 
lead ; in our system, they follow. In the former, the propositions 
determine results, or affect to do so ; in the latter, facts, by their 
practical operation, determine the propositions, because they deter- 
mine results. In the former case, the theory, or, rather, the hy- 
pothesis, is first, and the results are hypothetical; in the latter, the 
theory is last, and is made to depend on the facts. Our theory, 
therefore, is not one of propositions, formed irrespective of facts ; 
but a theory growing out of facts. 

Our theory, instead of being a preconceived hypothesis, like that 



THE NEW POINTS OF THIS WORK. 37 

of Free Trade, is in fact a theory, and involves an established con 
nexion between facts that have been and facts which, in Uke cir- 
cumstances, must necessarily follow, but which are not always 
found to be the same, in all circumstances, but often greatly di- 
verse. The doctrines resulting from our theory, are subject to 
such modification as facts and circumstances require, in the place 
where they are applied, being sometimes, in some particulars, in 
direct opposition in one place to those of another. It is not setting 
up an hypothesis to beget an entity ; but it assigns an adequate 
cause for the entity itself. The propositions of a sound system of 
public economy, therefore, are entirely contingent on the experi- 
ence of the past and a given state of things, and not determinate, 
absolute, and immutable, like those of Free Trade. 

We have included in our definition given institutions, as well 
as a given position and given interests of a state or nation, notwith- 
standing that M. Say has said, that " wealth is essentially inde- 
pendent of pohtical organization," or of the structure of society. 
We shall have abundant occasion to show that " political organ- 
ization," or the structure of society, is an " essential" element of 
public economy. This untenable position of M. Say, originated 
in a forced effort to divorce what he called " political economy," 
from *' politics," and to maintain it in the rank of the sciences, as 
if a statesman had nothing to do with the elements of legislation. 
The very purpose of public economy is for the guidance of legis- 
lators. It was quite unnecessary to take up this false position, to 
keep the teachings of public economy apart from the agitations of 
*' politics." There is no necessary connexion between these two 
spheres of action or of duty ; though it is impossible to destroy the 
connexion between the things taught and their practical use. The 
doctrines are promulgated from the closet; they are reduced to 
practice in the high places of the nation. The teachers are neces- 
sarily recluses, buried in the profound retreats of philosophy, as 
an indispensable incident of their vocation. Although they may 
desire that what they regard as truth may prevail, it is not their 
business to give it currency. But the main object of M. Say in 
asserting that " wealth is essentially independent of political organ- 
ization," or of the structure of society, was to guard his system as 
a science, and to put forward its prerogatives. 

We trust, therefore, it will be seen, that the new point we have 
made, in our definition of the general subject, is one of fundamental, 
pervading, supreme importance. Its very terms, once made out a5 



38 THE NEW POINTS OF THIS WORK. 

correct, are a complete refutation of the pretensions of Free Trade. 
If the public economy of a country is to be based upon its own 
experience, and if all the propositions constituting the system, are 
to arise out of the peculiar position, interests, and institutions of 
that country, it is not possible that Free Trade should have any- 
thing to do with it. 

It will also be seen, that, from our definition, as a starting point, 
the field of public economy opened by it, is entirely new. It is 
not the world, it is not all nations, it is not any two nations ; but it 
is one nation in particular. The law of the definition necessarily 
brings the subject within these limits. This imparts an entirely 
new character to the argument. With general propositions we 
have nothing to do ; it is a particular case. It is a system of pub- 
lic economy for the United States alone, which we are required to 
frame. It has been shown above, that it is not possible to con- 
struct one for all nations, nor even for two. All pretensions of this 
kind are utterly baseless, and can do nothing but evil, so far as 
they are influential. 

2. The next new point of this work w^e propose to consider, is, 
that public economy has never yet been reduced to a science, and 
that all the propositions of which it is composed, down to this time, 
are emj)irical laws. That it has not been reduced to a science, has 
already been shown. That all its propositions are properly subjects 
of science, we do not deny ; on the contrary, we maintain it ; but 
what we aver is, they have never yet been adjusted in a scientific 
and reliable form. Many of them are true and many are false ; but 
it is impossible to know which are true and which false, until they 
are brought under the severe test of scientific induction. We have 
done enough already to bring under suspicion, and in some cases, 
to falsify, all general propositions on this subject, such as those of 
Free Trade. The invincible rules of logic, such as w^e have cited 
above from Mr. Mill, put this question out of debate. We have 
yet to show that it is possible to reduce public economy to a 
science, by confining its propositions to a single case, or a single 
nation, and only in that way ; and also, that this work, by adhering 
to that rule, is constructed on the most rigid principles of scientific 
induction. 

But what is meant by empirical laics ? We do not mean by 
this imputation what is commonly understood by empiricism or 
quackery ; but we refer to a class of propositions, so denominated by 
loo-icians, to distinguish them from those which have not found their 



THE NEW POINTS OF THIS WORK. 39 

place in science. " Experimental philosophers," says Mr. Mill, 
*' usually give the name of empirical laws to those uniformities 
which observation or experiment has shown to exist, but upon 
which they hesitate to rely in cases varying much from those which 
have been actually observed, for want of seeing any reason why 
such a law should exist. It is implied, therefore, in the notion of 
an empirical law, that it is not an ultimate law ; that if true at all, 
its truth is capable of being, or requires to be accounted for. It is 
a derivative law, the derivation of which is not yet known. To 
state the explanation, the whij of the empirical law, would fee to 
state the laws from which it is derived, the ultimate causes upon 
which it is contingent. And if w^e knew these, we should also 
know what are its limits, under what conditions it would cease to 
be fulfilled. . . Now it is the very nature of a derivative law, 
which has not yet been resolved into its elements, in other words, 
an empirical law, that we do not know whether it results from the 
different effects of one cause, or from effects of different causes. 
We can not tell whether it depends wholly upon laws, or partly 
upon laws and partly upon collocation. . . Empirical laws, until 
explained, and connected with the ultimate laws from which they 
result, have not attained the highest degree of certainty of which 
laws are susceptible." But the following is, as we think, what 
more particularly applies to the present subject : " The property 
which philosophers usually consider as characteristic of empirical 
laws,'i£ that of being unfit to be relied on beyond the limits of time, 
'place, and circumstances, in which the observations have been made. 
These are empirical laws in a more emphatic sense. . . Until a 
uniformity can be taken out of the class of empirical laws, and 
brought either into that of causation, or of the demonstrated [sci- 
entific] results of the laws of causation, it can not with any assu- 
rance be pronounced true beyond the local and other limits within 
which it has been found so by actual observation.'''* 

Both the novelty and importance of the position here taken, de- 
mand some exposition. If it be well authorized, true in fact, for 
the purpose we have in view, it can not be too well understood. 
When Free-Trade economists have arrogated the high and dig- 
nified title of a science for their theme, one naturally asks, what 
sort of a science is it ? In what is its artificial structure apparent ? 
Where are the principles and rules by which we arrive at infallible 
conclusions ? A science, well and truly formed, can predict results 
with certainty ; it is the very nature of science to do this, and any 



40 THE NEW POINTS OF THIS WORK. 

pretension of this kind that fails in its predictions, is thereby proved 
false. Have the laws of public economy ever yet been so adjusted 
as to produce this result ? — Manifestly not. If they had, all the 
world would have known it, and there would be no controversy. 
The truth is, the whole subject still remains a wide field of empirical 
laws, not entirely useless, but yet unadjusted as to scientific order 
and relations, having not the slightest claim to the dignity of a 
science. If any should think we have failed in our classification 
of the laws of public economy, in their historical condition down 
to this time, as being empirical, let them tell us under what category 
of dogmas they should be ranked ; or let them say, if they choose, 
that they do not all belong to this class. We are not tenacious on 
that point. We only say, they have never yet been reduced to a 
science. That is evident, because there is no certainty of science 
in them. There is no uncertainty in figures, in mathematics, in 
geometry, in astronomy, or in the physical sciences generally, so 
far as their respective domains have been explored ; nor is there 
uncertainty in any science, the elements of which have been ascer- 
tained and adjusted in scientific order and relations. There can 
be none. It is the very nature of science to realize its predictions. 
We do not affirm confidently, that all the dogmas which ever have 
been uttered on public economy, will fall within the logician's defi- 
nition of empirical laws ; but we think they will generally be found 
there ; nor can we conceive how a more respectable rank could 
fairly be assigned to them. It is not simply for the convenience of 
classification, that we have put them there ; but because we could 
not find a more legitimate place. 

Now, let us consider what the characteristic of an empirical law 
is, as presented in the above citation : " The property of being 
unfit to be relied on beyond the limits of time, place, and circum- 
stance, in which the observations have been made." It may not 
always be so good as this ; but it can not be better. It must be 
seen, therefore, that it entirely cuts off the generalizations of Free 
Trade, and falls directly in the line of our definition. No law of 
public economy can be safely trusted except for " the time, place, 
and circumstance, in which the observations have been made ;'* 
that is, the observations which have established the law. The 
principle necessarily restricts every system of public economy to 
one nation — to that nation where the observations that have dic- 
tated its laws, have been made. Within these limits empirical laws 
may be serviceable, and by proper attention may be reduced to 



THE NEW POINTS OF THIS WORK. 41 

a science. For a wider range, it is not possible that a science 
should be made of them on this subject. In the language of Mr. 
Mill, in a citation under the former head, it is not simply " absurd, 
but abstractedly impossible." 

The effect of this new position, if it 'shall be allowed to be well 
sustained, is obvious. Dislodged from the platform of the sciences, 
on which they have always claimed to stand, and which was their 
sole authority, the Free-Trade economists are utterly discomfited. 
None, we think, can fail to see, after what has been proved above, 
that the pretensions of Free Trade to the rights and authority of 
a science, are perfectly absurd. 

3. We now propose to notice, as another new feature of this 
w^ork, that we have endeavored to subject its propositions, so far as 
they relate to the main question in debate, to the most rigid test of 
the recognised canons of experimental induction, as laid down by 
logicians ; and consequently, that, in this particular, and so far as 
we may be allowed to have succeeded, the subject will, perhaps, 
have some claim to be regarded as rescued from the field of empir- 
ical laws, and installed in the position of a science. 

We cite the canons, thus employed, from Mr. Mill, as follow : — 

1. " If two or more instances of the phenomenon under inves- 
tigation have only one circumstance in common, the circumstance 
in which alone all the instances agree is the cause or effect of the 
given phenomenon. 

2. " If an instance in which the phenomenon under investiga- 
tion occurs, and an instance in which it does not occur, have every 
circumstance save one in common, that one occurring only in the 
former ; the circumstance in which alone the two instances differ, 
is the effect or cause, or a necessary part of the cause, of the phe- 
nomenon. 

3. " If two or more instances in which the phenomenon occurs 
have only one circumstance in common, while two or more instan- 
ces in which it does not occur have nothing in common save the 
absence of that circumstance ; the circumstance in which alone the 
two sets of instances differ, is the effect or cause, or a necessary 
part of the cause, of the phenomenon. 

4. " Subduct from any phenomenon such part as is known, by 
previous inductions, to be the effect of certain antecedents, and the 
residue of the phenomenon is the effect of the remaining antece- 
dents. 

5. " Whatever phenomenon varies in any manner whenever an- 



42 THE NEW POINTS OF THIS WORK. 

Other phenomenon varies in some particular manner, is either a cause 
or an effect of that phenomenon, or is connected with it through 
some fact of causation." 

" These methods," says Mr. Mill, " are the only possible modes 
of experimental inquiry, of direct induction a jposteriori^ as distin- 
guished from deduction. At least, I know not, nor am I able to 
conceive, any others. These, then, with such assistance as can be 
obtained from deduction, compose the available resources of the 
human mind for ascertaining the laws of the succession of phe- 
nomena." 

Mr. Mill has demonstrated at large the truth of these canons. 
Any one who chooses to refer to the demonstration, will find it 
complete and satisfactory, beyond the possibility of error. 

We have not introduced these canons here because we expect 
to find room to make and explain their application along with the 
current of the argument where they apply ; but merely to suggest 
a recognised test, the authority of which w^ill not be questioned, 
and which can be employed as such by those who are already 
versed in these rules, or who will take the trouble to make them- 
selves acquainted with their application. Having already shown 
that public economy has never yet been reduced to a science, and 
as that object would turn us entirely aside from the specific design 
of this work, except as an incidental effect which may possibly in 
some degree be achieved, we are forced to decline a task which 
would of itself occupy the sole attention of a properly-endowed 
and properly-qualified mind, in a work not less extensive, perhaps, 
than that to which we are limited in an endeavor to develop the 
practical parts of this science. We conceive that the construction 
of this science is unoccupied ground, a field yet to be entered by 
some one, whose talents may qualify, and whose ambition may 
prompt, him to so laudable an undertaking. All that we profess 
is, that we have taken these canons as our rule in the construction 
of the main argument of this work, and that we have been essen 
tially aided by their light shining on our path. 

We for a long time thought that public economy never could be 
made a science in the strict sense of the term. But that position 
can hardly be maintained, if it be allowed that everything is a sub- 
ject of science, and capable of being brought into its place as such ; 
and if, moreover, it be considered, that it is a part of science to 
adapt itself to the nature of the subject. A science of contingent 
propositions, for aught that can be seen, is as supposable as one of 



THE NEW POINTS OF THIS WORK. 43 

uniform and immutable propositions. The propositions of public 
economy, as we hold, must necessarily change with a change of 
data ; and it can not be denied, that such changes are constantly 
transpiring in every commonwealth. It will be found that this 
principle of a liability to a change of data, presents itself on the 
threshold, and that it lies at the foundation of the science of public 
economy. It is impossible to cast it aside, or turn the back upon 
it, with any hope of a successful investigation, or useful result. A 
public measure required at one time, may, by events, or even by 
its own operation in the complete fulfilment of its purpose, require 
to be modified, or suspended, or superseded, at a subsequent pe- 
riod ; and the same measure may be of the greatest importance to 
one nation, which would be injurious to another, possibly to all 
others. Nothing can be more contingent than the propositions of 
public economy. 

If it should be said that a science must be of universal use, to 
establish its claim as such, it will be observed that we do not insist 
on the admission of this branch of knowledge to that rank, if it 
can not fairly be established in that place. We do, however, main- 
tain, that it has never yet arrived at that position. We also think 
that it may be brought there ; and we beg leave to suggest, in an- 
swer to the requirement of the attribute of universal application in 
a science, that it is not yet concluded to be wanting In this case. 
One of the conditions of this science, as already demonstrated, is, 
that every nation wishing to avail itself of its benefits, must look for 
its elements in the facts of its own history, and nowhere else. In 
that way it becomes of universal use, when every nation, for itself, 
shall have constructed its own system of public economy on the 
basis of its own experience. So far, therefore, is the abovenamed 
objection from proving that public economy can not be a science, 
as a contingent structure, or as a system composed of contingent 
propositions, it may be seen, that its very nature is of this precise 
description ; in other words, it is a science adapted to the nature 
of the subject. It would be absurd" to require that one science 
should prove another. It is sufficient if each one proves itself, and 
vindicates its own position. 

It must be admitted, that nothing is more desirable, in public 
economy, than that the certainties of science should be brought to 
bear upon it ; and nothing is more evident than that, hitherto, they 
have never been so directed. The reasons are obvious, as shown 
in our citations, here and there, from Mr. Mill. It was impossible 



44 THE NEW POINTS OF THIS WORK. 

that a science on this subject should be constructed out of the com- 
mon experience of nations for common use, or out of the experi- 
ence of one nation for the use of another. It is a subject on which 
generahzations are, as Mr. Mill justly observes, even " abstractedly 
impossible." It is only in the line of the experience of one nation 
that the rigid principles of such a science can be applied, and for 
that nation only. All beyond this field is a region of empirical laws, 
as before shown ; and of that precise category of empirical laws, 
which are utterly incapable of being reduced to a science. 

While, therefore, we do not claim to have formed a science on 
this subject, having had other work to do, we trust it will be al- 
lowed, that we have demonstrated the want of it, in establishing 
the fact that all pretensions of this kind hitherto put forward, are 
without foundation. If we have been so fortunate as to indicate 
the path, and open the door to the field where alone can be found 
the elements of this science, it will, perhaps, be of some account 
in the future efforts of those who may find it convenient to under 
take the task of reducing it to form. 

It can not be denied, that some study and close thinking are re- 
quired for the use and application of the canons of induction, above 
cited, to so intricate and complicated a subject as that of public 
economy. Fortunately, this is not necessary to be able to appre- 
ciate the argument that is based upon them. The facts and rea- 
soning may be perfectly apprehended by one who may never have 
heard of these rules, and who may have but little or no acquaint 
ance with the processes of scientific induction. He who is in- 
structed by experience and observation, is capable of reasoning as 
correctly as he who is instructed by science, and often does so with 
more unerring certainty of a true result. Experience never leads 
to error, and science itself is verified by experience. The canons 
cited above grow out of experience, and enforce respect and credit 
only as they are conformed to it. A man may be totally ignorant 
of the canons, when his experience, or the experience of others 
verified by facts, leads him to the same result. When science ac- 
cords with experience, it settles all controversy. Science is for 
those who occupy the higher, and who are capable of penetrating 
into the more profound, regions of human scrutiny, while experi- 
ence is for the common walks of life. 

As there is in fact but one great argument in this work, com- 
posed of various branches of what is commonly called argumenta- 
tion, each one of which in itself is an argument on some one point, 



THE NEW POINTS OF THIS WORK. 45 

or in some one line, to its own restricted purpose, it will be obvi- 
ous that the canons above cited are intended chiefly to verify the 
results of the reasoning on the main question between Free Trade 
and Protection. Though common judgment is for the most part 
appealed to, and it is hoped may be relied on, to produce convic- 
tion, in view of the facts presented, and of the reasoning built upon 
them, there is always a class of minds whose habits are addicted to 
scientific investigation, and which may be gratified in finding that 
an effort of this kind has not been made without regard to what are 
deemed scientific principles. It is fair to conclude, that they who 
are capable of appreciating these principles will also be sensible 
that, as the science applies to a great field and vast amount of facts, 
and to a protracted period of history, the great question presented 
is not a simple problem, nor extremely easy of solution. It is in 
fact a system in the highest and most comprehensive sense of the 
term. No one ever became master of geometry, chemistry, as- 
tronomy, or of any of the established sciences, without some pains, 
without application, hardly without vigorous and protracted effort. 
But the absolute sciences, if such a distinction may be made, are 
incomparably more easy than a contingent one, such as that of public 
economy. Every stage of reasoning in the former is under the gui- 
dance of immutable laws, and it is not easy to get out of the way ; 
whereas, the propositions of public economy which may be most 
important and vital to any and whatever nation, are undoubtedly 
contingent on a variety of facts, the bearings and relations of which 
may require the profoundest attention and the severest scrutiny, to 
be well understood for practical purposes. 

4. Another of the new points made in this work, or of the new 
positions taken — we are not particular to mention them in the 
order in which they may be found — is, that labor is capital, and 
the parent of all other capital. We do not mean that this is a new 
idea, or that it is a proposition that requires proof. But it has 
never before been introduced into a system of public economy as 
an essential element. "We put it first of all ; we make it funda- 
mental. As such, it pervades the entire system, without which, 
established in its own proper position, any system of public econ- 
omy, as will be found, would be radically, fundamentally defective. 
We profess, that we could not begin to write on this subject, in 
any hope of doing justice to it, and of coming out right, without 
first determining the true position of labor in public economy, not 
only as capital, but as the parent of all other capital. It may, in- 



46 THE NEW POINTS OF THIS WORK. 

deed, be said that the technicahties of science are in some respects 
and in some degree arbitrary ; but a misnomer in science, which 
for ever represents one of its chief and fundamental elements, not 
only in a false position, but in a position which puts every other 
element out of place, will for ever be fatal to the proper adjust- 
ment and right view of its parts. Such, we think, has been the 
necessary consequence of the exclusion by economists from the 
list of capitals that which is the parent of all, and which more 
properly deserves the name alone, than that its mere products 
should have superseded it in the nomenclature of art. There is a 
reason to be deplored in this malpractice, a moral cause, we fear, 
which aimed for ever to exclude labor from its rights. It reversed 
the order of nature, and transferred the cause to the place of the 
effect. It is not capital, in the common, or in what the economists 
have made the technical sense of the term, that was designed to 
employ labor, and in this condescension to enslave it ; but it is 
labor which in nature occupies the first place, and which was de- 
^ signed to be the employer of its own creations. It is virtually so 
always. That which is commonly called capital, can do nothing, 
is worth nothing, without labor. Labor is not only its parent, but 
its efficient and vivifying power. But, in the nomenclature of the 
economists, labor has been thrust from . its true position, and as a 
consequence robbed of its rights. 

5. That protective duties, in the United States, are not taxes, 
and that a protective system rescues the country from an enormous 
system of foreign taxation, are both new points, in a system of 
public economy, though not new ideas — and points of great, of 
vital importance, considered at large, in their place. The rule or 
principle of graduating Protection, also presents a showing that 
has never before been made, in works of this kind, as arising out 
of the difference in the joint cost of money and labor in this country 
and in those with which we trade. 

6. A very important point is made in this work, materially affect- 
ing the general argument, in a consideration of the different states 
of society in the United States and in Europe, which, so far as we 
know, has never been duly weighed as an element of public econ- 
omy. Conjoined with this, is, the subject of education, as a point 
which, in the peculiar aspects of American society, is deemed of 
great importance, and an element that has never had its proper 
position in the consideration of this subject. 

7. Another of the new points made in this work, is the founda- 



THE NEW POINTS OF THIS WORK. 47 

tlon of the value of money. Every theory of a monetary system Is 
almost necessarily a castle in the air, independent of this discovery, 
and of the knowledge that flows from it, as a guide, as a principle. 
It is true, indeed, that practical men, who take experience and ob- 
servation as their guide, may be right on this subject, for legislation 
or for financial and commercial purposes, as is often the case on 
other subjects, without knowing why they are so. But, in the 
construction of the theory of a monetary system, and in the eluci- 
dation of its parts, it is scarcely possible to avoid errors, which may 
be very serious in their consequences, so long as the true and only 
secure foundation of such a system, is not understood, nor even 
discovered. In all the isolated and empirical propositions, as to 
which the Free-Trade economists are right on this subject, they 
are so by the accidental sway of their good sense, in spite of the 
difficulties in which they are involved for want of a foundation to 
stand upon, and in spite of the defects and baseless condition of 
their theory, on which they are perpetually falling back, to float at 
random in the clouds, a prey to every wind. Practical men are 
generally right, though they do not know why. When a founda- 
tion is laid in nature for man to stand upon, they often go to work 
there without understanding the reasons of its firmness. That is a 
good bridge that carries people safely over. Accordingly, it has 
long been seen, by practical men, that no currency can be secure 
and permanent, which is not based on the precious metals; but it 
was not necessary, for practical purposes, since they were right so 
far, on this stage of causes, really but an effect of antecedent causes, 
that they should know what those antecedents were; that they 
should understand the real foundation of the value of gold and 
silver, in the form of money. To them, practically, it was no 
matter. But for a theorist, essaying to construct a monetary sys- 
tem, to be incorporated in a system of public economy, as one of 
its fundamental ajid most important branches, on which the most 
momentous results in the legislation of a state, of a nation, depend ; 
for such a pretender to sit down to this task, without knowing any- 
thing of the real foundation of th^ value of money, is not simply 
presumptuous, audacious ; but alas for the nation that is doomed 
to follow in the path of his precepts ! Such, precisely, and no 
better, on this point, have been the qualifications of the Free-Trade 
economists. Not one of them has ever understood the foundation 
of the value of money. If they did, tjiey would certainly have; 
stated it; and if thev had seen and stated it, they must have fol- 



48 THE NEW POINTS OF THIS WORK. 

lowed its leadings, and would have spared the world, not only the 
errors they have promulgated, but their consequences. 

8. Akin to this new point, or new position, as to the foundation 
of the value of money, is another we have made and urged, in 
regard to the distinction between money as a subject and as the 
instrument of trade. This naturally grows out of the foundation 
of its value, and would scarcely be discerned, except in that con- 
nexion ; though it is not impossible that it should be. This, too, 
for all practical purposes of the commercial world, has been acted 
upon, ever since a common currency was established. Nobody 
can find a time when it was not acted upon. It is, therefore, re- 
markable, even marvellous, that a truth so simple, so plain, so prac- 
tical, and therefore so important, should never have been recog- 
nised by the economists, as a distinct and vital element in a mone- 
tary system, and consequently in a system of public economy. It 
was the more important, that it should be recognised, because, for 
lack of it, a most momentous error has been introduced into all the 
systems of the Free-Trade economists, beginning with Adam 
Smith, and running down through the entire school. It is ap- 
parently the principal hinge, certainly one of the chief, on which 
their doctrine of Free Trade is made to turn. Not making this 
distinction, they assume that money is only a commodity in trada, 
and that it occupies the same position with all other commodities 
for which it is exchanged ; and consequently, that, for the greatest 
wealth of parties and nations, engaged in trade, the more they 
trade the better, whatever commodity they part with, be it money 
or anything else. This doctrine is even pushed, or naturally runs, 
to the extreme, that the more a party buys the better, as buying is 
only one side of trading, and necessarily implies that of selling. 
They aver, that selHng money is precisely the same, in public 
economy, as selling corn, calico, or any other commodity, that is 
not money — money, according to them, being only a commodity, 
ranking in the same class theoretically and commercially, and 
occupying the same position. According to this doctrine, when a 
party, being a nation or other, has parted in trade with all its cash, 
it is so much richer, and all the better for it ; as it retains an equiv- 
alent. It will be seen, that this distinction is vital to a system of 
public economy; and that the doctrine above indicated, which 
fails to recognise it, and which confounds the two things put 
asunder by it, forcing them, or one of them, into a false position, 



THE NEW POINTS OF THIS WORK. 49 

must necessarily be fatal to any party, a nation or other, that andei- 
lakes to reduce it to practice. 

9. iVnother of the new points of this work, next to the above- 
noticed distinction between money as a subject and as the instru- 
ment of trade, and growing out of it, is the doctrine, that money, 
as the instrument of trade, occupies, in every commercial com- 
munity, and with every party engaged in commerce, on a larger or 
smaller scale, comprehending merchants and every private citizen, 
precisely the same position as do what are commonly and tech- 
nically called "tools of trade," in any specific vocation, such as 
a shoemaker's kit ; such as a tailor's, or carpenter's, or mason's 
instruments ; or those of any other of the mechanic arts ; such as 
the implements of agriculture, and of the fisheries ; such as all 
the craft engaged in the various modes of navigation ; such as a 
lawyer's or physician's library, and a surgeon's instruments ; or 
any others that might be named as necessary to any vocation what- 
ever, under the name of "tools of trade." It is never pretended, 
that any business of life can be carried on, without its appropriate 
*' tools ;" or that it can be as well done with an imperfect as with 
a complete, an ample set. The gold and silver, separated from 
the great mass of these metals, to be used as money, are placed in 
this position solely to act as " tools ;" this is the beginning and 
end of their functions as money. When not so employed, they 
are of no manner of use, and of no value whatever, in the forms of 
money, except that for their intrinsic qualities, they are convertible 
.0 some of the other uses, in which their value chiefly consists. 
But while occupying the position and discharging the functions 
of money, they are mere "tools." Tools of what? Of trade, of 
commerce. And there are no other tools for this purpose, since 
they have been adopted as the common medium. What, then, can 
a man or a nation do, in the way of trade, without them, except to 
fall back on barter ? If it be said, that the trade of the world, and 
between nations, is mere barter after all, still it is no less true, that 
gold and silver are the " tools" for negotiating these exchanges, 
and they can not now be accomplished in any other mode. Every 
merchant's books are kept solely in the denominations of money ; 
and there is not at any time a commercial exchange negotiated, in 
the civilized world, large or small in amount, in which the values 
are not expressed, and the balances adjusted, by the established 
denominations of this common medium. Gold and silver, or their 



60 THE NEW POINTS OF THIS WORK. 

representatives, are the "tools of trade," all the world ovei, in 
commercial transactions. 

And yet the Free-Trade economists tell us, that it is no matter 
if these " tools" be sold ; that it is just the same to the party, as if 
anything else were sold ; that they are only commodities, and 
occupy the same position as all other commodities, in trade ; that 
he who sells his money, gets an equivalent, and therefore can not 
be injured ; and that it is a positive benefit to both parties. 

10. The appropriate functions of money, in defining and making 
them palpable, whereby it may clearly be seen when money is 
a subject or the instrument of trade, constitute another point of this 
work, not before made sufficiently clear, if made at all, for the 
practical purposes required. We have defined them as constitu- 
ting the faculties of expressing commercial values and of negotiating 
exchanges, and we have not been able to find any others. When 
money is bought and sold, as a subject of trade, it occupies a dis- 
tinct field, and the same position as other commodities in trade. 
It is this position of money that has led the Free-Trade economists 
astray ; or it is this, in the use of which, by their mode of reason- 
ing, they have led others astray. They have not passed from this 
field, as they should have done, where money, as a subject, is 
merely on its march to the field for which it is destined as the in- 
strument of trade, and for which only it has any value at all as 
money ; they have not, we say, passed to consider its position and 
functions in this latter field, where it acts as money, and constitutes 
the great moving power of the commercial world; but they have 
only speculated on money, while in its passive condition, before it 
has begun to do its work — the very work for which it is invoked 
from the great mass of the precious metals. They have considered 
it only while on its way to this destination. In all these stages, it is 
merely a subject of trade. But, when it comes to discharge the 
appropriate functions of money, it occupies a very different posi- 
tion, to wit, that of the "tools" of trade. 

11. Akin to this, also, is another new point we have been obliged 
to make, viz., that price is not an attribute of money, does not be- 
long to it, while employed as the instrument of trade ; but that its 
appropriate functions, as money, are to prize everything else that 
has a commercial value, or to express that value, and to move 
such values, or the things in which they are inherent, forward, in 
the field of trade, to their destinations. We have found it abso- 
lutely necessary to make this point, in order to rescue that part of 



THE NEW POINTS OF THIS WORK. 51 

the argument on which it bears, from the profound and inteuninable 
confusion, into which it has been thrown by the Free-Trade econo- 
mists, by ringing the changes for ever on the price of money, as 
high or low, dear or cheap, when, as the instrument of trade, it has 
no price, and no measure but that of th<3 scales, or of coins, which 
is the same thing. The world, by irrevocable law, and for suf- 
ficient reasons, has agreed to gold and silver as the common me- 
dium of trade, and in all commercial transactions, when it is em- 
ployed as such, the question is, how much money shall be given 
for such or such a thing ? And when the trade is concluded, that 
is the price. Of what ? Of the thing. Price belongs to the things 
for which money is given in exchange ; and not to money, while 
in the discharge of this office. The confusion is endless, and with- 
out hope of relief, when price is made the attribute of both, as the 
Free-Trade economists do ; and they do it, apparently, evidently, 
indeed, for not having made the distinction between money as a 
mbject and as the instrument of trade. That this practice is an 
ardfice, to make the mind contented, after having been forced over 
a sea of doubt and darkness, to land anywhere, we do not pretend 
to say. But such is the natural effect. 

12. We have endeavored to show in this work that an American 
protective system is identical with Free Trade in its operation and 
results, as the latter is generally understood by the people who go 
for it. This is a point of supreme importance. It is impossible 
that the masses of the people should understand this subject theo- 
retically ; they can only understand it as they feel it in experience. 
They know when they are blessed with prosperity, and when they 
are oppressed for the want of it, or by positive commercial evils, 
which cluster around them, and bear heavily upon them. But 
they can never understand, scientifically, how these different states 
of things are brought about, and they are governed chiefly in their 
opinion, as to the causes, by the authority of their party leaders. 
All they want is, their rights ; and under the captivating name of 
Free Trade, they are often led astray. They think that in this, as 
the name seems to import, they have a greater amount of freedom; 
whereas, as shown in this work, the reverse of this is the rule. 
Protection is the very thing they are after under the name of Free 
Trade. They want their own rights, and it is impossible they 
should enjoy them, except as they are protected from the injurious 
and calamitous effects of foreign cheap labor and foreign cheap 
capital, which, under a system of Free Trade, are constantly pour 



"i^ THE NEW POINTS OF THIS WORK. 

ng in ibeir products, to throw American labor and American cap- 
lal out of employment. As to the alleged advantage to consumers, 
we have shown, too, that even they are sufferers. We say, then, 
that the very objects which most people are in pursuit of by Free 
Trade, are only attainable by Protection. 

13. We have endeavored to show in this work that the destiny 
of Freedom generally, and particularly of American Freedom, is 
yet in the earlier stages of its career, and that',- for the people of the 
United States, it turns chiefly, if not entirely, on the Protection 
of American interests against the effects of Free Trade. This is 
a position which, with the light that is capable of being thrown 
upon it, makes a point of great interest, and can hardly fail to ar 
rest the attention of profound thinkers and enhghtened statesmen, 
who love their country, and who appreciate the means by which its 
Freedom has been acquired, and by which alone it can be retained 
and perpetuated. 

14. We have, also, endeavored to show that the entire struggle 
of the American revolution was based on the same principles as, 
and that the controversy between the British crown and the colo- 
nies was identical with, that which is now carried on between Free 
Trade and Protection. This is a point which, we think, can not 
but be appreciated ; and if so, it is of itself a decisive argument. 
If the objects contended for in the American revolution are indeed 
the same as those contended for by Protection, and if Free Trade 
is but another name, under which the claims of the British crown 
are revived, it ought to be enough. 

15. We think we have seen good reasons for the suggestion 
made in this work of a state policy existing in Great Britain for 
nearly a century past, the object of which has been to sow the 
seeds of Free Trade over the world, that Great Britain might reap 
the harvest. The history on this point is curious, and full of in- 
struction. The case supposes, that British statesmen, having 
observed the benefits of Protection, after they had adopted that 
policy, and foreseen the rapid relative advancement of their own 
manufacturing arts to a position that might bid defiance to the rest 
of the world under a system of universal Free Trade, did conceive 
and put in execution the far-reaching purpose of employing the 
most eminent talents of that empire, beginning with Adam Smith, 
and continuing it from age to age in the hands of different persons, 
making the duty imperative on the Universities, and bringing about 
a general sympathetic action among their own writers of ability, to 



THE NEW POINTS OF THIS WORK. 53 

propagate this faith, and to impose it upon other nations for the 
benefit of Great Britain. The point is this : That the British gov- 
ernment, through agents presenting themselves to the world, in the 
garb of scientific men, the better to command respect and attention, 
has, for nearly a century, preached Free Trade, not from a convic- 
tion of its truth, but as a state policy. So far as the evidence of 
probabilities can go, the sum of which, when they are chiefly moral, 
is often the strongest and most conclusive possible, amounting to 
what is called a moral certainty, this case is one which, when the 
facts are considered, can hardly fail to make an impression, and 
peradventure command belief; more especially as, on any other 
supposition, the facts could not be accounted for, and as, with this 
interpretation, they stand in the clearest light. It has, without 
doubt, been one of the best cards of statesmanship ever played in 
the councils of a nation. If the world had not been duped, the 
conception would have been stultified. That it has commanded so 
much attention, is credit enough for its authors and agents, how- 
ever it may not be a very great compliment to those who have sur- 
rendered themselves to this influence. 

16. Akin to this, and involving this, we have also made a dis- 
tinct point of the reasons of the rise and progress of the theory of 
Free Trade, which is the leading topic of the chapter which treats 
of the abovenamed point. These reasons, as they have presented 
themselves to us, and as we have endeavored to present them to 
others, are not more curious than instructive. The transient prev- 
alence of this false theory, is no more wonderful, than that false 
theories of astronomy should have prevailed for ages, for centuries 
even. The history of error is often as necessary to truth, as that 
of truth itself. 

17. Another new point in this work is, that freedom consists in 
the enjoyment of commercial rights, and in the independent control 
of commercial values fairly acquired. The public mind, for cen- 
turies, has been rife with the vaguest notions of freedom, and was, 
perhaps, never more so, than at this moment. Under its sacred 
and attractive name, men, to a great extent, have been chasing a 
phantom — an impalpable abstraction. We do not mean, that none 
of them have had any just notions of it. In that case, we should 
despair. We only tell what they themselves do know ; we give a 
copy of their experience ; we define the thing, that they may not 
err in the pursuit. Is it not singular, that freedom has never been 
defined, so as to be palpable, that one could lay his hand upon it? 



54 THE NEW POINTS OF THIS WORK. 

Nevertheless, we have shown, that the American fathers had jusl 
notions of it, as a practical affair, and that the controversy between 
them and the British crown, was about commercial rights and com- 
mercial values, exclusively ; that no people, in modern times, have 
ever complained of their government, or risen up against it, except 
on these grounds, as will be found when the reasons are sifted to 
the bottom ; that the object of every species of despotism, even 
spiritual, in all times, has been to rob the people of their commer- 
cial rights and values ; and consequently, that freedom must con- 
sist in the enjoyment and independent control of them, by those 
to whom they fairly belong, who, each one for himself, can say to 
all parties, to all the world, to unjust claimants especially, they are 
mi?ie, and not yours. We have endeavored to show, that this is 
the great question at issue between Free Trade and Protection ; 
that the former is identical with the claims of the British crown 
against the American colonies, and that the latter occupies the 
same position with the Declaration of American Independence, as 
made on the fourth of July, 1776; that Free Trade proposes to 
revive and continue the same old system, and that Protection as- 
serts and vindicates the rights of the new ; that these rights were 
the objects of pursuit by those who aspired to Freedom, for centu- 
ries before they were gained ; that the epoch of American inde- 
pendence was the opening of a new and important era as it relates 
to freedom ; that more than seventy years of that era have elapsed, 
and the question supposed to have been setded at the beginning, is 
still in debate, and unsettled; that the freedom since enjoyed, is 
rather one of form, than of reality ; that the agitation can only re- 
sult in its final and complete establishment ; that experience alone, 
long protracted and disastrous, can settle the question ; that it is 
not, properly, and can not be, except unnaturally, a question be- 
tween domestic parties of this country, but that it is an American 
question ; that it is purely a question of freedom ; and that every 
approximation toward Free Trade, in the United States, is a breach 
in the ramparts of freedom. 

18. Akin to this definition of freedom, is the necessity of an 
American system to protect it, as another new point in this work. 
We do not mean an American system, in the common sense, com- 
prehending a policy for domestic purposes ; nor do we pretend, 
that an American commercial system for foreign purposes, is a new 
idea : for that is the necessary character of any protective system ; 
but we mean a system adapted to the position of 'those things in 



THE NEW POINTS OF THIS WORK. 55 

which freedom consists ; an American system, properly and dis- 
tinctively such, to save and protect what has been acquired of free- 
dom, and to carry out its designs indefinitely, for the future. In 
all history, freedom has never been established on so broad a plat- 
form, and has never before had a chande to take up so favorable a 
position for the consummation of its destiny, as in the United States. 
But it would be a great mistake to suppose that that destiny is al- 
ready accomplished. Freedom here is vulnerable and exposed all 
round, and requires the shield of a truly American system, which 
is directly opposed to that of Free Trade. As we have determined 
that freedom — in these modern times at least, which is enough for 
our purpose — consists in the enjoyment of commercial rights, and 
in the independent control of commercial values fairly acquired ; 
and it being assumed, that freedom has, apparently, for the first 
time, in the history of the world, gained a position in the United 
States, where it can assert these rights and shield these values with 
effect, it follows, that this position alone is but a stage in the prog- 
ress of freedom, and that the formation, adjustment, and use of the 
shield, is quite another affair. This shield we hold to be an Amer- 
ican commercial system, formed in relation to the foreign world, 
and adapted to the position of the commercial rights and commer- 
•cial values of this country, in which freedom consists, so that they 
shall receive no damage from the action of foreign commercial in- 
terests and agencies. 

19. x\nother new point, which has seemed to us of no inconsid- 
erable importance, will be found in the argument we have made, to 
show, that Free Trade is a license for depredation, because it is 
based on the principle of anarchy. It inhibits law on a field where 
more and greater interests are at slake than on any and all others, 
and puts the weaker party in the power of the stronger all the world 
over, so far as this domain extends over the rights of parties, which 
is very comprehensive. By the mere absence of law, it creates a 
power of wrong, which, for its comprehensiveness, energy, and for 
the remoteness of its influence, is unrivalled among all the known 
devices of injustice. On this system, a strong man — strong in his 
commercial position — living under one national jurisdiction, may 
crush hundreds and thousands of weak men, living under another 
jurisdiction ; and the operation of the principle is without limit 
over the face of the earth, till the rights of individuals, in countless 
groups, and those of whole nations, are devastated by it. 

20. It has been thought and inconsiderately confessed, by some 



66 THE NEW POINTS OF THIS WORK. 

of the advocates of Protection, that the United States can afford 
Free Trade, in proportion as their manufacturing arts and other 
improvements shall approach that degree of perfection attained by 
rival nations, and that we can ultimately afford entire Free Trade. 
This confession overlooks the difference in the cost of money and 
labor between us and rival parties. No matter, though we come 
fully up to our rivals, in the perfection of our arts and other im- 
provements, yet, so long as the cost of money and labor here is 
one hundred per cent, more than in other quarters, so long, indeed, 
as there is any excess of such cost among us, it must be seen, on 
a commercial principle which never errs in its results, that Protec- 
tion may still be required to equalize this difference. It is this 
difference chiefly, much more, certainly, than any imperfection of 
skill, that makes Protection necessary in the United States. Some 
allowances ought doubtless to be made here for the superior advan- 
tage of our position and state of society ; but these are our own 
property, and we are under no obligation to give them to others. 

21. We do not claim, that the prominence we have given, and 
the importance we have attached, to the importation of agricultural 
products and labor, in the form and under the disguise of manu- 
factures, is a new idea, as we have acknowledged our obligations 
to others for its elucidation, and cited their reasonings. Neverthe- 
less, it has never, so far as we have observed, been incorporated 
with any system of public economy, as a distinct element. It is 
yet to be seen and felt, in this country, that it is one of the most 
comprehensive and most important facts to be considered, in the 
debate between Free Trade and Protection. They who advocate 
Free Trade among us, dwell with much emphasis on the preten- 
sion, that this is an agricultural country, though it might be difficult 
to see how it is more so than most other parts of the world, Europe 
especially. They say, agriculture is our interest and our destiny; 
and yet they advocate the importation of some fifty millions of dollars 
a-year of agricultural products and labor, more or less, in the forms 
of manufactures, not thinking, that the agricultural interests of the 
United States are thereby robbed, we do not say to the full amount 
of this, but certainly to a very large part of it. 

Nature, it is said, has indicated the natural occupation of man in 
North America, to be the culture of the soil. As if nature had not 
given the same hints in other quarters of the world ; as if the count- 
less rivers, streams, and waterfalls, in the United States, had given 
no advice on this point ; as if the lakes, bays, and other inland 



THE NEW POINTS OF THIS WORK. 57 

water channels, did not invite trade, which would ha\ a but a sler.- 
der occupation without the arts ; as if this great continent, abound- 
ing in all the resources of nature, were to afford no other sustenance 
to the human family but the milk of her own breasts ; as if all its 
tenants, like the aborigines, served by women in a state of bondage, 
were destined to vegetate on corn and decay for want of employ- 
ment ; as if the Anglo-Saxon race, transplanted to another and a 
better country, would consent to fall behind the rest of the world, 
or allow their brethren of the original stock to outstrip them in art 
or enterprise ; as if that people, known to all the world as Ameri- 
cans, and who alone are thought of in Europe under this name, 
would willingly be dependent ; as if they would for ever sweat and 
toil in the field to supply the raw material for a more delicate and 
refined race, that would condescend to return them the wrought 
product wrung in agony from their own slaves, at a cost five or 
ten, sometimes many hundred, and even many thousand times en- 
hanced, and draw away all the earnings of the American laborer to 
pay for it ; as if America were not a world in itself, and able by its 
ingenuity and skill to supply every luxury as well as every neces- 
sity ; as if the lovers of freedom had turned their backs on the old 
world, to become more abject slaves than they were before ; as if 
the powers of invention were native only to the European conti- 
nent, or to the Eastern world ; as if the moment a man crosses the 
sea from east to west, he is doomed to suppress all the nobler fac- 
ulties of his soul ; as if genius and art could not flourish in the 
western hemisphere ; as if, in short, America were fit only to be 
a dependent colony of Europe. A people without art, are fit only 
to be slaves, and are easily made such. A nation that is only the 
producer of raw materials, can never claim equality with nations 
which, by science and art, add many values to those materials, and 
send them back as a tax on those who consent to do such service. 

It was due, therefore, in our esteem, that a system of public 
economy for the United States — we do not profess to write for any 
other country — should fully set forth the greatness, extent, and im- 
portance of this element, which consists in such a large incorpora- 
tion of agricultural labor and products in those of manufacture. 
There is none greater, none, perhaps, of equal comprehensiveness. 
It is only wonderful, that it should have been so long overlooked, 
and that we search in vain for it in the standard systems of econo- 
my, though it claims the consideration of every nation. 

22, Another very important point of this work, briefly consid- 



58 THE NEW POINTS OF THIS WoAK. 

ered In the first chapter, and which we have never seen stated ex 
cept by M. Say incidentally, apparently without a thought of its 
bearing on his argument for Free .Trade, is, that there can not be 
two kinds of economy, one for private, and one for public purposes, 
any more than two kinds of morality. We maintain, that public 
economy differs from private, not in principle, but only in compre- 
hensiveness ; and that the difference consists in the fact, that in the 
former, more things are to be considered, and more relations to be 
ascertained, than in the latter. Let one man's business be extend- 
ed, and variegated by a great number of interests, as is often the 
case, and his system of economy becomes more complicated. In 
this way, it approximates, in the variety of its interests, to a system 
of public economy. This extension may be supposed to go on, 
and the interests to multiply, till the system is as broad and com- 
prehensive as that of a state. States differ from each other, in the 
magnitude, extent, and variety of their interests, as much as some 
of the smaller slates differ, in these respects, from the largest pri- 
vate estates. But a private individual, in the extension of his in- 
terests, and in the increase of their variety, is never so unwise as 
to introduce a new kind of economy, on that account ; but he scru- 
pulously adheres to those principles in the application of which he 
has prospered. It would not only be hazardous, but ruinous, to 
violate them. It is equally hazardous, and equally ruinous, for 
states to violate the principles of private economy — in other words, 
to violate the principles of economy, for there can be but one kind. 
And we have not only M. Say with us here, but Ricardo, who 
says : " That which is wise in an individual, is wise also in a na- 
tion." We have never found a point of difference, of any impor- 
tance, between us and the Free Trade economists, on which we 
could not cite them in support of our side of the question. It is 
because they could not say so much, without sometimes saying the 
truth. Some economists have been so bold, so extravagant, as to 
maintain, that public expenditures are good, because they employ 
labor, and disburse money among the people, even though the 
work, when done, is good for nothing; even though it be de- 
stroyed, as soon as it is accomplished. For like reasons, some 
have held that war is good. The economists of Louis XIV., and 
the king himself, defended his extravagances on this ground ; and 
they ruined France, economically and politically — the last as the 
consequence of the first. If public expenditures do not bring or 
leave a quid pro quo, they are equally injurious to the common- 



THE NEW POINTS OF THIS WORK. 59 

wealth, as are the expenditures of private individuals to them, when 
they realize no consideration. 

If a private individual habitually buys more than he sells, and 
keeps running in debt, every one can see what will be the result ; 
though the Free-Trade economists say he can not buy more than 
he sells, because, if he does not sell anything else, he sells money, 
and that money is nothing but a commodity in trade. But money 
beino- "the tools" of trade, as elsewhere shown, he who sells his 
" tools," can trade no more, except by barter. All know the con- 
venience and necessity of money, as "tools," to carry on trade ac 
tively and most profitably ; and this necessity is limited, or gradu 
ated, only by the extent and kind of one's business. It is equally 
bad for a nation to sell the money, or any part of the money, which 
the nature and extent of its trade require, to keep it going, and to 
make it prosperous, as for a private individual to do the same. 
The principle is the same in both cases. In the same manner, if a 
farmer can not sell produce enough to buy all he wants, he must 
either deny himself the gratification of some of his desires, or sup- 
ply them by his own labor, even though it cost more than he could 
buy these things for, if he could sell his labor. This is private 
economy, and public also. But we have shown elsewhere, that, in 
public economy for the United States, it will not cost more ; though 
it would be true economy, even if it should, as it is with private 
individuals. It need not be said, that that which is nominally the 
cheapest, is sometimes the dearest. 

We have thus noticed, in this chapter, a few of the new points 
made in this work, comprehending those we deem most important, 
for the purpose of showing, in advance, what influence they are en- 
titled to have on the general argument ; and we submit, even with 
the imperfect light of this summary statement, whether several of 
these points, each by itself, are not sufficient to decide the question 
between Free Trade and Protection. On some of these points, 
particularly the first three stated in numerical order, which are not 
argued iii extenso elsewhere, we have thought proper to bestow 
more attention here, as being of special importance, though not to 
disparage others by such a comparison, quite the majority of which 
are, in our esteem, vital and fundamental, running through the 
whole line of argument, and pervading the work as principles. 



60 MEANING OF FREE TRADE. 



CHAPTER III. 

MEANING OF FREE TRADE. 

The domestic Origin of the popular Application of the Terms, Free Trade. — Their Ad. 
Captandam Features. — The Unfairness of taking Advantage of these Features. — The 
true Meaning of Free Trade, directly the Opposite of what is commonly supposed. — Jus- 
tice on the Side of Protection. — Free Trade, to be Just, requires that all Nations should 
be one Family. — Universal Free Trade would create one great Central Power, at the 
Expense of all the Rest. — Weak Powers can only be defended against the Strong by a 
Protective System. — The Free-Trade Millennium an Absurdity. — Expensive and Cheap 
Organizations of Society, as they affect this Question. — American Instincts on tlie Rights 
of Labor. — The Objections to Protection are the Reasons for It. — The Free Trade of 
Adam Smith not the Free Trade of the Present Time. 

Much is saved in debate on any question, and the necessity of 
debate may often be avoided, by a right understanding of terms. 
" Free Trade" is ostensibly, and in itself naturally, an ad-captan- 
dum phrase, especially with the uninformed. " Free Trade and 
sailors' rights," was on the public banners of the war of 1812, and 
it became incorporated with the heart of the people. Some think 
that " Free Trade," as now used, in opposition to the protective 
policy, means the same thing as it did in the war of 1812; whereas 
it then had reference to the claim of the British government to visit 
our merchant vessels on the high seas, search for British subjects, 
and impress them into her public service, by which means Ameri- 
can citizens were often impressed. It was this violation of the 
rights of American seamen chiefly that occasioned the war, as this 
" right of search" could not be allowed by the government of the 
United States. One of the great principles involved in this contro- 
versy was freedom of trade over the public highway of the seas, 
under a national flag, without being stopped, visited, searched, or 
questioned, by the public vessels of other nations ; and the other 
great principle was, the sacredness of the rights of American sea- 
men against such violation. Hence the expressive phrase which 
came into vogue at that time, and which was used with so much 
power and effect, " Free Trade and sailors' rights," as being what 
the nation went into war for, and for which they were stimulated to 
maintain the contest. It is very unfair, therefore, to take advantage 
of the attachment of the nation to such a principle, by using the 
same expression, " Free Trade," as if it meant the same thing now, 



MEANING OF FREE TRADE. 61 

or some equivalent, when it means a very different thing, which, 
when it comes to be understood, will rather be hated than loved; 
which the people would rather fight against, than for. 

There is another reason, consisting in the captivating influence 
of the phrase itself, and of its different forms, which leads many 
minds astray. " Free Trade ;" " freedom of commerce ;" " free 
ports ;" " trade where and with whom you please ;" " buy as 
cheap as you can and sell as dear as you can, without let or hin- 
derance ;" these and other like forms of phraseology, constituting a 
mere cant, when employed in this service, seem very reason- 
able at first sight, and are captivating because they are fallacious. 
The idea conveyed by these phrases, is not the true notion of Free 
Trade, as opposed to the protective principle maintained in the 
United States. It is, on the contrary, entirely a false coloring of 
the subject. Free Trade, as now used, involves a question of 
right and wrong, of justice and injustice, not between parties, both 
of which are American, but between all Americans, as one party, 
and the rest of the world, as the other party. It being assumed, 
that all Americans are interested in American labor, the question 
is, whether American labor, which, at great cost of blood and 
treasure, has gained an independent position and a fair reward, 
shall be again reduced to a condition of dependence and lose its 
reward, by being forced into a competition with the enslaved labor 
of foreign nations, especially with that of Europe, the comparative 
condition of which is set forth in other parts of this work. Or, to 
put it in another form, the question is, whether a party, once 
wronged, and having by its own virtue and energy rescued itself, 
shall be exposed unnecessarily to the same wrong again ; whether 
it shall throw open its own doors, and give free entrance to robbers, 
because they choose to call their depredations " Free Trade." It 
is indeed " Free Trade" to them, by such consent, with profit ; 
though it can not be profitable to the party that is robbed. 

"Free TraHe," then, in its signification as now used, and in its 
practical operation on the people of the United States is, to allow 
foreign nations to bring their labor for sale — or the products of 
their labor, which is the same thing — into this country without tax, 
against American labor, when the cost of the latter is three times 
as much as that of the former, and when, besides, it is taxed, in 
the maintenance of its own government, to purchase for foreigners 
this privilege ; in othor words, to allow foreigners to undersell 
American labor, in the American market, and thus to reduce its 



62 MEANING OF FREE TRADE. 

price and reward to the same level with that which is brought into 
competition with it, after which, as will be shown hereafter, the 
American consumer gets none of the benefit of foreign cheap labor, 
while x\merican labor is broken down. This is a true and fair 
definition of " Free Trade." It is virtually a toleration of injus- 
tice, and that of the worst kind, because it is all done under th^ 
mock pretence of justice and fraternal intercourse ; and the strangest 
part of it is, that this toleration should be consented to by the in- 
jured party. 

This question of justice may be further illustrated by a consider 
ation of the great and comprehensive fact involved in the obvious 
inequalities, physical and other, which are found in the condition 
and position of different nations ; of their diverse interests ; of the 
dissimilarities in their social organization ; of their different degrees 
of improv-ement in productive labor and in the productive arts; 
and of the necessity of taking care of their own interests, arising 
out of these facts. No two nations are equal or alike ; but in a 
thousand particulars are unequal and unlike. All these inequalities 
constitute weak and vulnerable points on one side or the other; 
and all these dissimilarities are so many necessities of a public 
policy adapted to them. Justice demands such discrimination, 
and it would be very great injustice not to employ and apply it in 
legislation and government. 

If any choose to set up the impracticable theory, based on the 
assumption that all nations are one family, and that therefore a 
system of perfect Free Trade would be best for their aggregate in 
terests — which is the romance of the Free-Trade doctrine — il 
labors under the disadvantage of encountering two insuperable dif- 
ficulties, first, that all nations are not one family. No one but a 
visionary could reason on such an assumption. Next, the prac- 
tical operation of such a theory would concentrate the w^ealth of the 
world at once on the strongest points, and withdraw it from the 
weakest. It would make the young and weak nations slaves to 
the old and strong, and the tendency would be to give one nation, 
probably Great Britain, an ascendency over all the rest, to be con- 
stantly, positively, and relatively strengthened in that position ; in 
other words, to make all nations tributary to one. For in whatevei 
point or points any one nation might be the strongest, at the com- 
mencement of such a system, she would not only be able to main- 
tain that superiority, but constantly to augment her relative power 
and influence in these, and by the help of these, in other particulars. 



MEANING OF FREE TRADE. 63 

It is possible, indeed, that the great family of man, as one family, 
might accumulate more wealth in a given time, under such a sys- 
tem. We will not pretend to decide, as it is quite unnecessary. 
The great and insuperable objeqtion to it, is that the wealth and 
magnificence of the world would be concentrated, at the expense 
and by the impoverishment of nearly all its parts. 

Such, really and truly, in its operation, is the Free-Trade theory ; 
and such would be its natural and unavoidable results. It would 
be a total prostration of all the barriers which guard and defend the 
interests and rights of particular communities, called states and 
nations, always putting the weaker in the power of the stronger, up 
to the strongest of all, the last of which would absorb the control 
over all the rest. It would create a universal dominion for one 
stupendous power — which could easily, and would naturally, be 
converted into a world-wide despotism, without one loose fragment 
to be disengaged from the sway of its sceptre. 

But it is thought, by reasonable persons, that the interests of 
humanity and the rights of man are best protected by fortifying the 
weak against the encroachments of the strong, and by setting up all 
possible barriers against that "Free Trade" which consists in 
spoliation, and which arms only the mighty against the defenceless. 
It is generally thought best rather to multiply independent sov- 
ereignties, than to diminish the number, by allowing the greater to 
swallow up the less; rather to surround the less with muniments 
of defence, than to rase to the ground those already standing. It 
is shown, in a subsequent chapter, that the occasion of the Amer- 
ican revolution was a wrongful absorption of the commercial values 
of the colonists by the British crown, and that the benefits of the 
acquisition of national independence, consisted in the estahlishment 
of a power competent to retain and defend those commercial values. 
But "Free Trade" would expose these values to be drawn away 
again, and again to be absorbed by foreign exchequers. It is simply 
a question of justice, as the American revolution was a war of jus- 
tice — of justice to the nation and to the people — and precisely, 
identically the same interests are at stake now as then. " Free 
Trade" would give up all which American independence acquired 
— all that is worth having. 

The only hypothesis of society that is consistent with Free 
Trade, is, that all nations should be equal and alike in all respects. 
Can anything be more absurd, than a theory whicji demands this ? 
It requires that as a basis which is not, never was, and never can 



64 MEANING OF FREE TRADE. 

be. Even if a universal millenium of republican institutions, or of 
any other form of government that might be thought best, after all 
experiments, could be brought about, so that all nations should be 
exactly alike in their social organization, without the slightest dis- 
similarity, and admitting that every nation should have made pre- 
cisely equal advances and improvements in the various applications 
of labor and art; still the physical diversities of climate, geography, 
geology, mineralogy, and a thousand other particulars, entirely 
independent of social organization, which would necessarily apper- 
tain to each nation or state, creating many great and peculiar in- 
terests, would be an insuperable bar to the introduction and prac- 
tice of Free Trade, and would occasion very great injustice to 
some of the parties, if the system should be established. 

But the actual social dissimilarities among nations, as elsewhere 
shown in these pages, interpose a far more formidable obstacle to 
Free Trade, than all physical differences. This constitutes a 
greater objection in the United States, than in any other nation that 
can be named. The high prices of labor and capital in this coun- 
try, are the results of a cheap social organization, or cheap govern- 
ment ; and the effect is now as necessary to sustain the cause, as 
the cause was originally necessary to produce the effect. They 
are now reciprocally cause and effect of each other. The differ- 
ence between this state of things and that of Europe, is, that what 
is saved by cheap government in the United States, goes to the 
people, and what of commercial values is extorted from labor in 
Europe, is absorbed by the governments and by the high and in- 
dependent classes of society. In Europe the wealth of the wealthy 
and the power of the great, are sustained by this usurpation of the 
rights of. labor. In the United States the rights of labor were in- 
tended to be protected by a bar to such usurpation, which consists 
in social organization — these rights being always understood to 
be commercial first, and political as a consequence, or because they 
are commercial. The moment the bar adapted to this position of 
things, and to these interests, is removed by letting in Free Trade, 
all these commercial interests of the people of the United States, 
which consist in the high prices of labor and capital, are exposed 
to be reduced to the level on which the same things stand in for- 
eign parts, in the same manner as water of different heights in two 
adjunct basins comes to a level, by the removal of the partition 
which divides them. By this means all the advantages of the 
social organization of this country would be sacrificed, lost, swal- 



MEANING OF FREE TRADE. 65 

lowed up ; and the great misfortune would be, that, as the water 
was highest in our basin, it would flow away from us, and none 
would come back. When foreign labor which costs one — or its 
products which are the same thing— ^ comes into the same market, 
on a Free-Trade platform, with American labor which costs three 
— or with its products which are the same thing — it is absurd to 
suppose, that American labor will still maintain the relative value 
of three to one. They must both come to the same level. The 
social organization of the United States, as being of little cost, 
would then be of no value to the American people, but all the 
profit would redound to the interests of foreigners and of foreign 
potentates. Or, with this change in the condition of the people, 
before independent, now abject, would come a corresponding 
change in their character ; and with these changes would naturally 
follow a change in the government, from cheap to costly, and from 
a government that serves the people and obeys their will, to one 
that would serve itself and follow its own will. In other words, 
as Free Trade must necessarily reduce the American people, in 
their condition and character, to the level of foreign abject nations, 
so would it elevate the American government to the same height 
of power and grandeur with foreign governments, to be independent 
of the people, under which the labor of the people, as in Europe, 
would become the agent of power, as described in a subsequent 
chapter. For, when the people shall have surrendered or lost 
their rights, it would be strange and unnatural if the government 
should not usurp the high and independent prerogatives laid at 
their feet, instead of yielding them to foreign powers. The social 
organization of all nations accommodates itself to the condition and 
character of the people, and will correspond with it whether as 
cause or effect. At present that of the United States is a bar to 
Free Trade, because the condition and character of the people is 
inconsistent with it. Their instincts make them aware, that they 
can not work on the same terms with the poorly-fed, ill-clad, worse- 
housed, and uncultivated, abject laborers of foreign parts. It is 
true, indeed, that some experiments of Free Trade have been 
attempted in this country, by approximation ; but, as will be shown 
hereafter, every such experiment has brought widespread cala- 
mity in its train, and shaken the republic to its centre and to its 
foundations. The reason of these disasters and convulsions, so 
widely and so profoundly felt, will be found in the social organization 
of the country, and in the condition and character of the people, 
5 



66 MEANING OF FREE TRADE. 

they being incompatible with such experiments, and incapable of 
enduring them without instinctive alarm and sensible effect, as if 
tending to dissolution. 

The objections to the protective principle are the reasons for it, 
m the United States. One objection is, that it is unjust. One of 
its best reasons is, that it is the only way to secure the ends of jus- 
tice in the case. What could be more unjust, than to reduce Amer- 
ican labor, in its reward and condition, to that of Europe? It has 
been averred, indeed, but without evidence, and with the sanction 
of a mere hypothesis, that it operates unjustly on the consumers of 
protected articles. It will be shown, in a future chapter, that Pro- 
tection, in the United States, is no tax ; so that the only objection 
that can be raised, on the score of justice, falls to the ground. 

It is also alleged, that a protective system — M. Say stigmatizes 
it as "the exclusive system" — is unfraternal in one nation toward 
another. How can justice be unfraternal ? It is inequality and 
dissimilarity of condition and circumstance, which render such 
measures necessary to prevent injustice. Can fraternity either de- 
mand or impose anything but what is right ? Suppose it has been 
found necessary to protect American labor. The foreign millionaire, 
who has robbed the labor of his own country of two thirds of its 
fair compensation, and who by that means can afford to undersell 
American labor in its own market, complains of a want of fraternity, 
because the American government will not let him do it ! Frater- 
nity, in such a case, demands too much. 

It is moreover alleged, that so long as nations continue their tar- 
iffs of Protection, they put off the grand commercial millennium 
of the world, universal freedom of commerce. This, manifestly, 
is in some sort begging the question, as if such a millennium were 
of course really desirable. So long as universal freedom of com- 
merce would operate unjustly, on account of the relative inequality 
of like commercial interests in different nations, or on account of 
dissimilarity in their respective social organizations, there does not 
appear to be any sound argument in favor of it. A millennium of 
this kind may be a very fine theme for declamation, when it would 
be very bad in practice. We could but smile, when, in our hear- 
ing, one of these declaimers concluded every part of his debate 
with an opponent, with the assumed triumphant refutation : " But, 
sir, what you say is contrary to the theory ;" that is, contrary to 
the Free-Trade hypothesis ! His respect for this assumed dogma. 



MEANING OF FREE TRADE. 67 

was greater than his respect for fact ; nor could he give weight to 
a fact that was contrary to his dogma. 

Although Adam Smith is called the father of Free Trade, it 
will be found, that he did not advocate the doctrine in the sense in 
which it is now used. Indeed, it was not till after the battle of 
Waterloo and the general pacification of Europe, that this Uto- 
pian theory was attempted to be put in practice, under the influence 
of Great Britain, whose counsels were at that moment predomi- 
nant. Europe was intoxicated with her triumph over Napoleon, by 
whose sway all her commerce had been deranged, and she run wild 
in the hopes of a new era. It was a fine chance for British policy 
to operate, and open the world to her manufactures. The states 
of the continent, emerging from the chaos and disorder into which 
trade had so long been plunged, or from the unnatural condition 
into which it had been forced by the will of one man, run wild with 
a feeling of emancipation, and were just in the mood to be caught 
by the fancies of the Free-Trade theory. They appeared to con- 
sent to it en masse. But it was not long before sad experience 
brought them to their senses. Russia came back to the protective 
system first, under a most able report from the hand of Count Nes- 
selrode ; the same disappointment and reaction brought into exist- 
ence the German Zoll-Verein ; until, finally, every state in Europe 
practically rebelled and broke loose from the fatal charm by which 
they had been caught. 

In proof that Adam Smith never thought of Free Trade as now 
taught, observe the following facts : The first thing which he as- 
sails, in his work, as opposed to the notions of Free Trade which 
then had existence in his mind, is the incorporation of trades or 
crafts in England, as practised at that time, and as has been con- 
tinued, to some extent, down to the present pe.riod. Most, if not 
all trades or crafts, of any considerable importance, were incorpo- 
rated, such as goldsmiths, saddlers, tailors, cabinet-makers, fish- 
mongers, &c., &c., with certain privileges, such as the right of 
making their own by-laws, and governing the body in their own 
way, so that they could Hmit their numbers, and control the prices 
of their products and wares. Under this system, great abuses of 
privilege were imposed upon the public. This, as every one will 
see, is what we know nothing about in this country, no such thing 
having ever existed here. It must also be seen, that it involves a 
principle entirely different from that of duties laid on imports, for 
the protection of domestic against foreign trades. We have shown, 



68 MEANING OF FREE TRADE. 

in a subsequent chapter, that such duties in the United States 
cheapen the prices of articles protected, instead of raising them, 
and in a thousand ways benefit all classes of the community, not 
excepting the consumers of the protected articles. And yet it was 
against this incorporation of trades, a thing so entirely different, a 
mere municipal regulation, bad enough certainly, that Adam Smith 
broke his first lance, in the cause of Free Trade. That this was 
always in his mind, as a starting point, and as a general basis, ap- 
pears from the facts, that he begun with it in Book I. Chapter X. 
Part 2, and is still using it, in Book IV. Chapter III. Part 2, to 
enforce his Free Trade doctrine, in such terms as the following : 
*' As it is the interest of the freemen of a corporation," such as the 
goldsmiths of London, " to hinder the rest of the inhabitants from 
employing any workmen but themselves, so is it the interest of the 
merchants and manufacturers of every country to secure to them- 
selves the monopoly of the home market," &c. Having started 
with this original idea, it ever after seemed impossible for him to 
distinguish between the principle of these municipal corporations, 
and that of a corporation embracing a whole nation, where the latter 
chooses to take care of itself in regulating its foreign commerce. 
The cases are totally different, and yet Adam Smith always reasons 
as if there were no difference. 

Next we find him very justly declaiming against companies in- 
corporated for foreign commerce, with exclusive privileges, such 
as the Hudson Bay company, the South Sea company, the Royal 
African company, the East India company, &c., &c. All these, 
clearly, were monopolies, and well worthy of being denounced ; 
and it must also be seen, that there is no likeness, in fact or princi- 
ple, between such examples of restriction and the protective policy 
of a nation. At another time, we find him railing against laws pro- 
hibiting the export of domestic coin, though the export of foreign 
coin and bullion was allowed. Here he lighted on something 
which was not so easy to manage ; and like an excited person, 
finding it in his path, he resolves to put it out of his way. It is 
true, the law was a foolish one, and so far as it was intended to 
prevent the payment of balances against the country, it was unjust. 
No nation should allow itself to be caught under the necessity of 
such a law, or of bank suspension. It was because there had been 
too much Free Trade, that Adam Smith took occasion to make an 
argument in favor of it. 



FREE TRADE A LICENSE FOR DEPREDATION. 69 



CHAPTER IV. 

FREE TRADE A LICENSE FOR DEPREDATION ON THE RIGHTS 

OF OTHERS. 

This a New Position. — It is based on the Principle of Anarchy. — The Essence of Free 
Trade is a Plea for no Law over an important and wide Domain of Interests. — Defini- 
tion of this Domain. — Nations are Commonwealths, and may be vulnerable or injurious, 
in their Relations to each other, the same as Private Individuals in each. — The Defensive 
of Man's Position, in all Circumstances, requires most Care, and costs Most. — Time only, 
and protracted Experiment, will determine the relative Merits of Free Trade and a Pro- 
tective System. — The Point of Vulnerability in the United States, opened by Free Trade. 
— The great Problem one of Figures and Cluantilies, that can be worked out. — The 
Negative Losses occasioned to Individuals and to the Country, by Free Trade, though 
Real and Serious, not easily ascertained. — More and greater Interests at Stake, on the 
Ground proposed to be given up to Anarchy by Free Trade, than anywhere else. — The 
Hen and Chickens and Hawk are like Nations and Free Trade. — How this Anarchy of 
Free Trade operates. — It is real Anarchy quo ad hoc, opening a vast Field for Depre- 
dation. — Free Trade is the Sway of the Will of the Individual, as opposed to that of 
Society. — The Principle of Free Trade everywhere at Work for Depredation. — Free 
Trade not equally Fair for both Sides. — Great Britain not for Free Trade. — An important 
Confession of a Member of Sir Robert Peel's Government. — The Absurdity of making 
Laws for the less important Sphere, and doing without Law in the most important. — 
The Charge of Free Trade against Protection, falls back on Itself, in precisely the same 
Form. — Under Free Trade we are forced to buy, in the Form of Manufactures, the same 
Things which we produce, while our Products perish on Hand. — Answer to Objections 
to the Theory of this Chapter. — Free Trade operates, through a second Party, to injure 
a third Party, and the Scope of this Influence takes in whole Nations, as Subjects of its 
Depredations. 

It is proposed, in this chapter, to pursue a line of argument, 
which is not attempted in any other, based upon a principle, which, 
so far as we know, has never before been applied to this subject. 
An argument is always more satisfactory, when the principle on 
which it is based can be distinctly apprehended. That which we 
have in view to invoke, in this place, is as well known and under- 
stood as any other in the social state, to wit, the principle of o,n- 
archtj. It will be found, upon examination, that Free Trade is 
based upon this principle, so far as it is proposed to extend its do- 
main, simply because it pleads for no law. If the ground on which 
it is designed to apply this system were unimportant, and no inter- 
ests were at stake, the case would be different. But it is evident 
enough, from the interest which the world has taken in this ques- 
tion, for ages past, and from the increasing interest which it acquires, 
in the progress of events, that it is not deemed unimportant, and that 



70 FREE TRADE A LICENSE FOR DEPREDATION 

great interests are supposed to be involved. If this be so, it would 
obviously seem strange, that anybody should propose to subject this 
important matter, and these great interests, to the domain of anarchy, 
where might is the sole principle of right. One is startled at the 
idea, and could hardly believe, if the fact did not, present itself, 
that such a purpose could be seriously entertained. The mind of * 
every person naturally labors under the suggestion, and would, per- 
haps, fain believe, that there is no foundation for it. Let us see 
whether it be so. 

The essence of Free Trade is an opposition to legislation on 
foreign commercial intercourse. What is this but a plea for the 
non-existence of law, as to the subject in question, and as to the 
interests concerned, if there be any? And what is the non-exist- 
ence of law, but a state of anarchy, so far as this negation of juris- 
prudence extends? It is not pretended, that Free Trade pleads 
for universal anarchy ; for it does not assume to dictate to the com- 
mercial transactions of the domestic sphere of a nation, however it 
may influence them. The question is not so broad ; more prop- 
erly, perhaps, it is not so narrow. Though intra-mural in its influ- 
ence, its appropriate domain may, perhaps with propriety, be called 
exlra-mural^ or without the bounds of national jurisdiction. It will 
be seen, however, that it always stands with its foot on the line of 
that jurisdiction, asserting rights within, as well as wielding powers 
without. It claims to pass this line without law, bringing in and 
carrying out what it pleases, without question or condition ; buying 
and selling in both these quarters, with the same extent of privi- 
lege. So far, therefore, as its appropriate transactions are con- 
cerned, it would seem to assert the claim of being without law 
anywhere and everywhere, within as well as without every national 
jurisdiction. But it is enough for our purpose, if we allow, that 
this claim is confined to the passing of this line, to and fro, in its 
pursuits. We grant, that it does not ask to be exempted from the 
jurisdiction of a state, while it is within it; nor from that of the 
law of nations, while it is on the highway of nations ; but it only 
claims exemption from law, as to the subject in debate, while it is 
passing and repassing the border lines of every national domain. It 
can not but be seen, therefore, that the claim is one of anarchy, so 
far as the question extends, which merely relates to the conditions 
of passing and repassing a line, with such things in hand as may 
suit the person or party. The conditions which he makes are, to 
go and return, without paying for the privilege ; in other words, 



ON THE RIGHTS OF OTHERS. 71 

free of toll. It is not law, but its non-existence. The turnpike is 
thrown open, and the statute is laid upon the shelf. 

We are aware it may be said, it is pretty nice work to find 
anarchy on a line. What more can be asked, it may be demanded, 
than to obey the laws within a given jurisdiction, and not to violate 
the established code of the civilized world, when passing from one 
national jurisdiction to another ? But reflection will show, that 
the argument can not be fairly concluded in this way. It will be 
found, that this claim to pass and repass the lines of national juris- 
diction, without toll, carrying whatever may please one to trade 
with, on either side of those lines, affects very materially the in- 
terests, and consequently the rights, of the great and minor parties 
within these respective jurisdictions. Nations, as one grand com- 
munity of the human family, occupy similar relations to each other, 
as do the individual members of a particular society, and can be 
injured, in the same manner as the members of a separate com- 
monwealth in their relations and intercourse — injured in their 
separate wholes, and in the parts of those wholes — for want of 
protection in their peculiar position and interests. Each one of 
these nations has interests to defend against the encroachments of 
the other, in the same manner as private persons have in the com- 
mon relations of life ; and the experience of the world is, that the 
defensive of man's position and rights, whether in private or in 
public relations, is more important to him, and requires more care, 
generally costs more, than all his other interests. One of the chief 
designs of society, in all its forms, is for protection in these par- 
ticulars. A man does not want society so much to prompt his 
actions, as to guard his acquisitions, and make his future exertions 
profitable. The domestic sanctuary, and the home estate of every 
individual, ewe thair security to the shield of law. It was his own 
agency, or that cf his ancestors, which created these benefits ; it is 
the law that makes them valuable as a future rehance. But for the 
kw, these rights would be exposed every moment ; but for this, 
they could not be relied upon for a single day. One rarely sees, 
or duly appreciates, the benefits of society, while he enjoys 
them. Take away the shield of law, and where and what would 
a man he ? 

The operations of a Protective system over the foreign com- 
i erce of a nation, to guard and defend the domestic rights of its 
ilizens; ar- of the same invisible and inappreciable character, as 
hose of common law, in the common relations of life. They can 



72 FREE TRADE A LICENSE FOR DEPREDATION 

not be felt, with a lively sensibility, till they who enjoy them, are 
deprived of them. So also, the first effects of a Free-Trade sys- 
tem, are so indirect and complicated, that it requires some close 
attention, distinctly and fully to apprehend them. They are 
necessarily immeasurable, because there are" no palpable rules by 
which they can be ascertained with exactness ; though the ultimate 
effects are not only evident enough, but overwhelmingly so. For 
example: It is impossible to estimate exactly how much Amer- 
ican capital is thrown out of employment, or turned into channels 
less beneficial, perhaps injurious to the public, by the avalanche of 
products of European capital, thrown upon the country by Free 
Trade ; or exactly how much American labor has been super- 
seded, or how much its prices have been impaired, by this exces- 
sive importation of foreign labor ; or exactly how much American 
arts have been put back, by this system of dependence on foreign 
arts ; or exactly how many forms, or what extent, of profitable enter- 
prises, employing capital and labor, have been suppressed by it; 
or exactly how much the country has been impoverished and 
weakened, in a given time, by the same cause ; or exactly how 
much, in the same time, under a Protective system, it would have 
been advanced in wealth and strength ; or exactly how much indi- 
viduals may have suffered under one system, or how much they 
would have profited under the other. All these influences are, in 
a manner, impalpable, and their first effects are chiefly negative. 
Who can exactly measure their extent and magnitude? But the 
ultimate effects of Free Trade are evident enough, as being very 
great. Our history demonstrates it, as set forth in subsequent 
parts of this work, in the general prostration of the business of the 
country ; in a wide extent of commercial embarrassment and bank- 
ruptcy ; in a slack demand for labor, and in its low prices ; and in 
the general distress of all classes of the people. A half-dozen years 
of Free Trade, or of a defective system of Protection, have never 
followed each other, in this country, as our commercial history will 
show, without bringing with them these painful and calamitous 
results ; and ordinarily, two or three years of Free Trade are 
quite sufficient to produce them all. Short crops in Europe, as 
in 1846 and 1847, making an extraordinary demand on America 
for breadstuffs, may stay this result for a season ; but nothing can 
avert it, in an ordinary state of the world. 

It is because the United States are vulnerable to all the foreign 
world, under a system of Free Trade, and because the foreign 



ON THE RIGHTS OF OTHERS. 73 

world is aware of it. That vulnerability consists in the high price 
of our labor, and in the imperfection of our arts. Open these two 
points to the world, by Free Trade, and there is no escape from 
the consequences. Europe pounces upon us, like the bird or beast 
of prey upon its victim. With her cheap labor, she can break 
down the high value of ours; for both, on the basis of Free Trade, 
are in the same market ; and therefore make this result a necessary 
consequence. It is a simple question of arithmetic, or of mathe- 
matical quantities ; and there is no more certainty in figures, or in 
mathematical results, than in this economical problem ; for both 
depend on figures and quantities, and are decided by the same 
principles. Europe, with her arts, on the basis of Free Trade, 
will overwhelm our arts ; that is, will arrest our progress, and in 
some things put us back. To arrest the progress of a nation in 
arts, in wealth and strength, is a negative result, and therefore the 
measure thereof can not be easily ascertained. But is it for this 
reason a small thing? Where a nation is actually put back, it is 
more obvious. We have several times been put back, in this very 
way, as shown elsewhere ; and it has always been the result of 
Free Trade. 

We are aware that Free Trade still avers, that American con 
sumers of these products of foreign cheap labor and of foreign arts, 
have the benefit of the cheapness of the one, and of the superi- 
ority of the other ; but facts, adduced elsewhere in these pages, 
show that this averment is false in both particulars. As to the 
first, foreign producers do not descend upon us, except at points 
where they are sure to beat us, not only retaining to themselves, 
after the struggle is over, all their usurpations of the rights of labor 
in their, own quarter, but in the end, maintaining their prices, be- 
cause, we being beaten can not help it ; and those prices are 
always higher than for the same products, furnished under an 
American system of protection, as we have elsewhere demonstrated 
by comparative statistics and tables. And as to the second, viz., 
the benefit of superior arts, we have also proved, that American 
arts, encouraged and sustained by Protection, afford us not only 
cheaper, but better articles, than foreign arts. On both these 
points, therefore, which are the chief ones — indeed, all the points 
of any importance — the argument for Free Trade utterly fails, and 
that for Protection is established. 

It is not so much to drive us from the ground we have already 
acquired, under a Protective system, and where we miy be too 



74 FREE TRADE A LICENSE FOR DEPREDATION 

stro.ig, in some particulars, to be ejected, that foreign producers 
enter the lists with us, when that system is prostrated ; but it is to 
arrest the growth and extension of our arts, to discourage new enter- 
prises among us, and to supply a vast field of our new and increas- 
ing wants, which we ourselves could and should supply, both 
cheaper and better, under a system of Protection. It is in this 
latter field, where we suffer most by Free Trade, which being, for 
the most part, a negative loss, is not so quickly or so easily per- 
ceived. Nevertheless, it is a real, a great, an immense loss — a 
vast and comprehensive depredation on the rights of the com- 
munity. The principle elsewhere presented in these pages, that 
social rights extend to all the chances of the future, under an 
equitable system, as much as to the enjoyment and control of the 
acquisitions of the past, applies here. Free Trade destroys these 
chances, and conveys them over to foreign powers and foreign 
factors. It arrests American progress, cripples American enter- 
prise, embarrasses American capital, discourages American arts, 
and impairs the rights of American labor. Its march is stealthy ; 
but its aim is sure. Its work of devastation is slow ; but in the 
end it is overwhelming. It is not till years have rolled away, that 
a nation, guilty of this folly, reaps its harvest of public and private 
misfortunes. 

It requires no little knowledge and much reflection, to appreciate 
these negative effects of Free Trade. For example, because en- 
terprises, well established, are not broken down by the subversion 
of a Protective system, it is triumphantly proclaimed, that the 
change does no harm ; whereas, a just view of its effects can not 
be had, without considering how many other important enterprises, 
which would have employed much labor, and brought great wealth 
to the country, have been strangled in the birth, the contingent 
benefits of which are not seen, because, not being realized, in con- 
sequence of this change of system, the negative loss can never be 
known, and will not be so sensibly felt as positive losses are. 

Free Trade, it will be observed, demands a state of anarchy, of 
non-legislation, on ground where more and greater interests are at 
stake, than on any other in the wide domain of civilization, and 
where the difficulties of securing and protecting the rights involved 
in them, are more formidable than anywhere else, on account of 
the imperfection of the law of nations, and on account of the power 
w^hich, in such a state of things, the commercial agencies of one 
nation, may have over the commercial rights of another. The 



ON THE RIGHTS OF OTHERS. 75 

code of international law, important as it is, so far as it goes, does 
not approach the subject now under consideration, nor does it, in 
any particular, provide for it. This is a ground, over which Free 
Trade demands, that there shall be no law whatever, and claims 
for it the arbitrary sway of unbridled license, where the most selfish 
passions of the human race are constantly in action, and excited to 
the highest pitch by the lust of wealth and power. The tempta- 
tions for depredation in this field are as much greater, as the mag- 
nitude of the objects and the chances of success are more con- 
siderable than in other quarters. Under the ordinary jurisdiction 
of an independent state, the relations of society are defined, and the 
rights of its members, in relation to each other, are protected against 
offenders. But Free Trade proposes that there shall be no code 
over these relations between nations, so far as commerce is con- 
cerned ; though it can not but be seen, that the commercial rela- 
tions of these great parties, are all that are of any material impor- 
tance as subjects of legislation. International commerce, be it 
more or less, is composed of parts, and every separate transaction 
is independent of every other — is private, and as such, is a transac- 
tion of the social state. It can not be said, that it does not belong 
to the domain of law, of equity, and that it does not require the 
supervision of authority, ajid the protection of its arm. But ac- 
cording to the dogmas of Free Trade, one has only to take up the 
position of " an outside barbarian," and he may with impunity 
lay his hands upon the commercial rights of the people of any 
nation whatever, if by any means he can bring a foreign commer- 
cial agency to bear upon them to his own profit and their injury. 
His license is vested in his position as a foreigner. He acquires 
power, in every country, in an inverse proportion to his rights there ; 
and having no rights at all, his liberty is uncontrolled. The 
chances are a thousand, a miUion to one, that he will find plenty 
of commercial agencies in any part of the world, any one of which, 
according to this system, will be adequate to absorb and swallow 
up a countless number of commercial rights in any other part of 
the world. The innocent hen that is industriously scratching the 
earth to feed her interesting family, is not more exposed to the 
bird of prey, that is now circling through the air above her head, 
and which will the next moment bear aloft in his talons one o? 
more of her charge, than is every man within the bounds of civili- 
zation, to the Free-Trade rovers, who darken the heavens with their 
baleful wings, to live on plunder wherever a nation is unwise 



b FREE TRADE A LICENSE FOR DEPREDATION 

enough to expose itself to their rapacity ; and there is just aoout 
as much law in the one case as in the other. It is for want of 
law, in this particular, and only for that, that any nation, thus ex- 
posed, is perpetually robbed. Why should it not be? And who 
can prevent it, so long as she herself does not? By the case sup- 
posed, she has thrown away her shield ; or has not taken the 
trouble to keep it in hand. She has taken the word of the roving 
bandits, on the highway of nations, that they are all honest men ; 
that they will do no harm ; that their law, which is anarchy, is the 
best law ; that the hen and chickens are perfectly safe ; that no 
bird of prey will ever descend upon them ; and that, though they 
propose to come among them, it is only for fair exchange, and to 
leave a quid jJro quo ! 

Our design, in this chapter, as avowed, is to illustrate a well- 
known principle, viz., that of anarchy, in this particular application, 
and not to enter largely into the details of the general argument, 
which have their place in subsequent parts of this work. Our 
wish here is to show the absurdity of making laws for the citizens 
of a commonwealth, in their relations to each other, and of attempt- 
ing to do without law, in the relations between citizens of different 
and independent commonwealths. To maintain that laws are 
necessary for domestic intercourse and^not for foreign ; that home 
trade should be regulated, and foreign not ; that a rogue who cheats 
his fellow-citizen should be punished, and that a foreigner shall be 
free to come in, and do that indirectly with impunity, which a 
citizen may not do in any form ; that domestic trade shall be taxed 
for the entire support of society, and foreign trade not taxed at all, 
even though it has every advantage of the commercial facilities of 
the country, and deprives home trade of all which itself carries on, 
and home labor of all which it brings in ; — this, certainly, is a very 
extraordinary system of hospitality ! Is it not one of the most 
glaring absurdities that ever entered the mind of a man, who did 
not also, for the sake of consistency, advocate the abolition of all 
law, that all parties might be on an equal footing ? 

It will, perhaps, be said we are dealing with a shadow, with a 
nondescript and imaginary department of the social state. But 
that can hardly be called imaginery, which impoverishes or en- 
riches a nation, an effect conceded on all sides, inasmuch as the 
argument between the parties in this debate, is, as to which of two 
systems will do the one or the other. Nor can it be said, that the 
ground we speak of is already covered by law, on either system 



ON THE RIGHTS OF OTHERS. 77 

That it is covered by law for other purposes, we do not deny , 
but, quo ad hoc, as to this purpose, the very question is, whether 
it shall or shall not be covered by such authority. Free Trade 
forbids, and Protection demands it. ' 

If it be still asked, where is the ground, what is the field, in 
question? We answer: It is that comprehensive and immense 
domain of commercial rights, which appertains to every independ- 
ent state, in its peculiar position, interests, and institutions, so far 
as they are peculiar, and consequently its own property. But the 
peculiar rights of this wide and vast field, can not be fully ap- 
preciated, for the purpose now in view, till they are regarded as 
belonging to the individual members of the state, the sum of whose 
rights of this description constitutes the whole. They are, in the 
first place, the property of the nation ; next, they are the property 
of the individuals of which the nation is composed. They have 
cost the nation much, and have cost every individual in it or his 
ancestors much, or somebody with whom he is connected, in pro- 
portion to his stake in the community, and he is perpetually bur- 
dened with a system of taxation on their account. The question 
between Free-Traders and Protectionists, is, whether these pecu- 
liar rights shall be maintained, in behalf of those to whom they 
belong ; or whether they shall be tlirown open to foreigners, to 
whom they do not belong; whether, being thrown open, foreigners 
shall be permitted to enjoy the greatest benefit ; whether, indeed, 
foreigners, from their own peculiar and advantageous position, shall 
be permitted to make these rights nearly or quite valueless to citi- 
zens ; whether they shall be permitted even to oppress and enslave, 
after having robbed, the inheritors and proprietors of these rights. 
That all this is possible, and that it has all been experienced, none 
will deny, who have made themselves acquainted with the recorded 
wrongs of the North American colonists, under the British crown 
— wrongs which, to be redressed, cost rivers of blood and mount- 
ains of wealth. That much of this has been experienced by the 
people of the United States, even since the achievement of their 
independence, is made evident enough by the pages of our com- 
mercial history, citations from which, for this purpose, are displayed 
in subsequent parts of this work. It is this vast field of rights, 
which Free Trade proposes to give back to Great Britain, back to 
Europe, back to the entire foreign world, by striking from our 
statute-book the only shield of protection which they have, or can 
have. It is in this manner, and so far — too far, indeed — that the 



78 FREE TRADE A LICENSE FOR DEPREDATION 

principle of anarchy applies to this great and momentous subject, 
and threatens unbridled license to all the world, for depredation 
on the rights of a great, laborious, long-suffering people. 

That the principle of Free Trade is one akin to that of anarchy, 
it is only necessary to observe, that one of its technical definitions 
of itself, is, that it is based on the laissez-faire precept: that is, let 
things alone ; let them take their own course ; let men, quo ad hoc, 
do as they please ; don't embarrass them with rules. In view of 
the fact already established, that there is no department of the com- 
mercial world, which has so much influence on every other, for 
good or for evil, as this very ground which is in contest between 
Free Trade and Protection, of the truth of which this strife itself 
is a sufficient evidence — since men do not usually contend so long 
and so earnestly for that which is of no consequence — in view of 
this, we say, one would think it could hardly be pretended, that it 
is a matter of indifference, whether this ground be, or be not, cov- 
ered by law ; much less, that it ought to have no law at all, which 
is the claim of Free Trade. 

We shall be instructed, not a little, on this point, by a consid- 
eration of the objects of all law, and of any laws whatever, of civili- 
zation itself, in all its parts and degrees, and of the improvements 
which are constantly being attempted by legislation. These ob- 
jects, let it be observed, are always to get away from anarchy 
— to be further removed from those evils, which, at any given 
time, are experienced, from defects of law, or the want of it. Even 
a bad law was never repealed, and society was never dissolved, for 
the sake of going back to anarchy. Anarchy is that state of things, 
which all lovers of order, and of the rights of the social state, dread, 
and fly from, on the principle of self-love and self-preservation ; 
and every improvement of society, by legislation, is attempted, with 
a view to diminish and remove any remaining evils of this original 
state of things, of which there are always some, under the present 
imperfections of the social state. It can ^hardly be conceived, that 
society, in its legislation for laudable purposes, could ever have 
any other object, than to limit the sway of the will of individuals, 
and to establish the will of the great mass, so far as the former may 
be opposed to the latter. The first is, perhaps, as good a definition 
of anarchy as one could give. Nor is it a bad definition of the 
principle of Free Trade ; for, let it be observed, that this principle 
is not confined, in its applications, to foreign commerce ; but it is 
found everywhere, invading rights of the social state, which are 



ON THE RIGHTS OF OTHERS. 79 

imperfectly defined by law, and if possible violating, by evasion or 
open breach of law, even those which are not only distinctly de- 
fined, but universally recognised. It is the reign of the will of the 
individual, as opposed to that of society ; and as good members of 
society are not in the habit of asserting this claim, it is uniformly 
found, when found at all, in the mouths and acts of bad members. 
It is the non-restrictive system, whether found in the ordinary forms 
of the social state, or in that great and wide field covered by foreign 
commerce, in both of which the fundamental principle is the same. 
And this principle applies not only to the present, as it may have 
arisen out of the past, but to the future, as it may arise out of the 
present ; not only to rights acquired, but to the chances of acquiring 
more. Freedom holds more precious its future chances, than its 
present possessions. It is an ambitious, aspiring spirit, which can 
not brook the darkening of its prospects. What did the American 
fathers contend for, against the British crown ? A principle, and 
that on account of its prospective influence. It was not the past or 
present, so much as the future, which originated and sustained that 
contest. Every citizen of a free country, and of laudable enter- 
prise, being secure of the present, is laying his plan and striving 
for something yet unacquired, regarding his future position and in- 
terests, in the prosecution of which he has a claim for protection 
from society ; and there is not a single private interest in the land, 
which is not reached and affected, disastrously or otherwise, by 
foreign commerce ; not one — that of the importing merchant ex- 
cepted — in the case of citizens of the United States, as shown 
elsewhere, that would not be invaded, impaired, wronged by it, 
without a national system to protect it, as certainly as that a uni- 
versal depredation on the rights of society, without resistance, would 
be followed by its dissolution. It is even more certain ; for, in the 
latter case, there would be the conventionalities of a state of barba- 
rism, to afford some protection ; whereas, in the former, the parties 
acting on each other, would be too remote in their relative position 
for the benefit, even of such conventionalities. Just in proportion to 
tliat remoteness of position, and much more in consideration of the 
fact that each party is under an independent jurisdiction, should 
the laws of foreign commercial intercourse be more carefully de- 
vised, and more rigidly maintained on the Hne where the two juris- 
dictions come in contact. At best, there is a chasm, a great and 
impassable gulf, between them, so that an injured party in one can 
not go for redress to the courts of the other. 



80 FREE TRADE A LICENSE FOR DEPREDATION 

Even under the same jurisdiction, with a system of domestic regu- 
lations intended to guard the rights of citizens in their relations to each 
other, every person, as above shown, is exposed to the invasions and 
depredations of the principle of Free Trade; and notwithstanding 
all the privileges and guaranties of law, and all the vigilance of pub- 
lic justice, and all the power of the arm of public authority, he is a 
fortunate man, who gets through life, without experiencing the ills 
of Free Trade. For, be it understood. Free Trade, in its practical 
operations, does not consist, as is commonly supposed, in buying 
where one can the cheapest, and selling where one can the dearest ; 
but in taking advantage of the non-existence of law, to encroach 
upon the rights of others, and rob them. It is, at bottom, a system 
of roguery, of depredation, either in a field where there is no law, 
or by the evasion of law where it exists. In this, we mean only to 
characterize the principle, and not to represent the character of all 
commercial transactions founded upon it. 

And will it be said, that Free Trade is equally fair for both 
sides ? And can not those who say this, see that the principle 
leads directly to the dissolution of all society, and gives the field to 
him who has the most advantageous position, the most wit, the 
strongest arm ? Such, undoubtedly, are the results of Free Trade. 
There is no principle of the social state, on which it can be 
founded. It is virtually an unrestrained license for depredation. 

But, let us see, if Free Trade is equally fair for both sides. 
There can not be found two nations equally advanced in the arts 
and in the facilities of producing those things which men want or 
desire, and consequently must have ; nor any two in which the 
cost of production is the same. The difference, in these partic- 
ulars, between some nations, is very great. 

The question involved is simply, whether the comparatively un- 
skilful and w^eak can cope with parties more skilful and stronger, 
without some adventitious aid — a question, the very statement of 
which, one would think, ought to settle itself. Can any argument 
prove, that two things given as unequal, are equal? How is the 
unpractised and comparatively weak pugilist or wrestler to en- 
counter, with hope of victory, his skilled and athletic opponent ? 
How can a Mexican army beat an American army of equal num- 
bers? This is the question. Great Britain by a protective sys- 
tem, commenced about two centuries ago, and continued down to 
this time — a system not yet abandoned, notwithstanding all her 
pretensions to the contrary, and never designed to be abandoned, 



ON THE RIGHTS OF OTHERS. 81 

except as she succeeds in drawing the rest of the world into the 
trap, where, though caught with the rest, it is an instrument of her 
own contrivance, in which she, the cat, will be able to swallow all 
the birds at a mouthful. Great Britain, we say, has, by her pro- 
tective gystem, risen to be the richest and most powerful nation on 
the globe. The abolition of the corn laws excepted, the only 
points on which she has granted Free Trade, are those in which 
she is skilled and strong, and can bid defiance to all the world ; and 
this she has never done without the formal consent of the parties 
concerned, made to the board of trade, which presides over all such 
questions, the government giving to those parties, at the same time, 
a boon, in the abolition of duties on their raw materials imported 
for manufacture ; so that, these very acts were in fact measures of 
protection, and operated as such, while they were vaunted forth to 
the world, under the name of Free Trade. Even the abolition 
of the corn laws was a grand measure of protection to the empire, 
that the only remaining obstacle, to wit, dearness of food, to the 
triumph of her manufacturing system over all the world, might be 
removed. Thus, every step of advance, on the part of Great 
Britain, in the march of Free Trade, so called, has been to her, and 
to the parties concerned, a measure of protection. It was to 
strengthen yet more, and fortify her own position as the great work- 
shop of the world. She has never abandoned, and never will 
abandon, her system of protection, though she is the only nation 
that can afford it. It is absurd to call that Free Trade, every 
stage of which, in the effect of the abatement of British duties, 
operates on the parties concerned, as a measure of protection. 
The Hon. G. Smythe, associated with Sir Robert Peel in the 
government of Great Britain, and who went with Sir Robert in all 
his measures, called Free Trade, candidly said, in a speech at 
Canterbury, on the state of the nation, in the summer of 1847 : 
" I can not quit this subject of Free Trade', without expressing my 
opinion on its abstract principle. I by no means hold that the 
principle of Free Trade is absolutely true, or that it is of universal 
application. If I were an American, the citizen of a young country, 
I should be a protectionist. If I were a Frenchman, the citizen 
of an old country, with its industry undeveloped, I should equally 
be a protectionist." So here we have the truth from one who 
knows, and who could say, of all the self-styled Free-Trade move- 
ments of Great Britain, magna pars fuL Yet he confesses, that 
there is nothing in the principle of Free Trade of general applica- 
6 



B2 FREE TRADE A LICENSE FOR DEPREDATIOX 

ticn, and that the doctrine is a false one. He would be a protec- 
tionist in America, in France, and doubtless in any other country, 
not excepting even that of Great Britain, where he advocated the 
abolition of protection only over certain parties who were prepared 
for it in the strength of their position. This represents the true 
state of the question, as being entirely one of expediency, con- 
tingent on circumstances, ' and not one of fixed and determinate 
principles, for general application. It is solely a question of com- 
parative strength of position, all things considered, and not a doctrine 
that can be relied upon in all or in any cases. If beneficial to one 
party, it might for that very reason be injurious to all others, and 
to some very disastrous. 

The leaving of this important field, unprotected by legislation, 
is the same as surrendering it to lawless rovers and commercial 
bandits. It invites them in, and creates their characters as depre- 
dators on the rights of American citizens. They are received and 
hospitably entertained, while they prey on the vitals of the com- 
munity whose guests they are. There is no law prescribing terms 
of their entrance; for it is the condition of Free Trade, that there 
shall be none ; and being here, with all the advantages of the places 
whence they come, they cripple the citizen and tie up his hands ; 
take from him his living and his bread, while the citizen pays all 
the taxes of that state of society which secures to the foreigner 
these advantages over himself. 

But how do foreigners commit these depredations on the rights 
of the people, under a system of Free Trade ? In what manner 
does it operate ? In the first place, it forces the people to pay 
more for what they buy of foreigners, when it supersedes a domestic 
product, notwithstanding that Free Trade alleges that they pay less. 
Facts prove, that Protection wields a comprehensive and sweeping 
influence of this kind, which, in a course of years, after domestic 
competition has had time to operate, produces a very sensible and 
a very material change ; and it is rarely true, that the prices of 
such articles are raised, even at the beginning of a system of pro- 
tection. For it is found, by experience, that although the prices 
of some of the articles in question, are sometimes transiently cheap- 
ened by the removal of Protection, they are scarcely ever, if in any 
case, enhanced by the establishment of a protective system. The 
cheapening, in the first place, is the result of a competition, in an 
unsetded state of things, which can ordinarily be but of short dura- 
tion ; and the continuance of prices on the same level, and some- 



ON THE RIGHTS OF OTHERS. Zijf 

times the reduction of them, in the latter case, results, first, fr;>m 
the competition between the domestic and the foreign producer, the 
latter of whom will still try to hold on to the market ; and next, by 
a domestic competition, when the home production is well estab- 
lished. This is acknowledged by both Say and Ricardj. 

The doctrhie of Free Trade, on this point, is thoroughly falsified 
by facts, and the war is turned back on Africa. It is a just and 
grievous complaint, that Free Trade costs more than Protection, 
in the very articles which it claims to cheapen, and the alleged 
cheapening of which constitutes its only plea. Free Trade not 
only imposes an additional burden, where it promises to remove 
one; but it prevents the establishment of a system which would 
make that burden less than it was before, being thus aggravated by 
Free Trade. Instead of rescuing us from foreigners, it puts us 
back into their power ; instead of giving us a chance of getting 
things which we want at a fair price, it forces us to pay the ex- 
penses of European thrones and institutions, usurped from the 
rights of labor ; and thus a positive tax is imposed upon the country, 
by Free Trade, instead of relieving it from one. It may easily be 
seen, that an American system of adequate protection, ought to 
give us articles of manufacture cheaper than Europe w^ould do, 
with her onerous institutions, so long as she might have control of 
our market. In that case, she is sure to make us pay her taxes, 
as we always do, under a system of Free Trade. Here is the 
cause which accounts for the fact, that whenever the protective 
policy has prevailed in the United States, our manufactures, before 
obtained from abroad, have been cheapened, and continued to 
cheapen, as long as that system was sustained. The prices cur- 
rent of the same articles, at any given time, in Europe and x\mer- 
ica, under an American protective system, can not fairly be brought 
to bear upon this question. The differences prove nothing, ex- 
cept the natural effects of a limited market for European products, 
and that, if we would give them our market, they would imme- 
diately raise their prices ; nor, as before remarked, do the transient 
effects of disturbing our system, by abolishing Protection, prove 
anything reliable on this point. It is only the high, comprehensive, 
permanent, and controlling influences of a system, which are to be 
regarded in such a case, and which claim the attention of a states- 
man, to guide him in a safe path for the service of his country. By 
this rule, the facts arrayed in other parts of this work, prove con- 
clusively, that an American Protective system rescues the country 



81: FREE TRADE A LICENSE FOR DEPREDATION 

from the immense and onerous system of European taxation, in 
the prices of the very articles which Free Trade falsely claims to 
cheapen. Nor is there any exception to this rule, injurious to any 
parties in the country whatever, rich or poor, individual or asso- 
ciate, or sectional; because, as elsewhere shown, the general and 
comprehensive benefit of a Protective system, operating upon all, 
more than indemnifies for any transient and inconsiderable burden, 
which such a system may here and there impose, not permanently, 
but as the mere accident of fugitive events. 

Here, then, under a system of Free Trade, is opened a field on 
which whole nations, all Europe, the entire foreign world, with 
?,heir systems of commercial policy, and all the parts of those sys- 
tems, in which individual and associated enterprise operates, with 
all the power of their cheap labor and more perfect arts, descend 
upon us, without let or hinderance; enter our jurisdiction without 
tax and without condition, freighted with their wares and merchan- 
dise ; avail themselves of all our public works and facilities of trans- 
portation, created by our labor and at our cost, to penetrate every 
corner of the land, entering every cabin in the remotest parts of the 
western wilderness ; for what? and to what end? To sell to our 
farmers, throughout the length and breadth of the land, corn, wheat, 
rye, barley, beans, and every species of breadstuff's that can be 
named as the product of our soil ; to sell us beef, pork, mutton, 
butter, cheese, lard, chickens, and every species of meat that we 
produce ; to sell us cattle, horses, mules, and every beast of draught 
and burden ; hay, oats, provender, and everything that constitutes 
the sustenance of these animals ; to sell our planters rice and cotton ; 
in a word, to sell us, Americans, the products of forests, the fowls 
of heaven, and the fish of the sea ; to sell us everything that land 
and water produce by the sweat of those who toil on them; for, we 
have proved elsewhere, that all these things enter in disguise into 
the products of manufacture, and that the former compose the great- 
est portion of the latter ; of the truth of which, no man that reflects, 
can for a moment doubt. It is a great and comprehensive fact. 
And they not only sell, but they force us to buy. We can not 
help it, under a system of Free Trade. They are here, in our 
market, with their wares, composed in the manner above described, 
of the very things which we produce, in abundance, and with sur- 
plus ; but for want of the encouragement of Protection, we can not 
put them in these necessary and convenient forms. We must have 
hem, though the very materials of which they are made, perish on 



ON THE RIGHTS OF OTHERS. 8> 

our hands for want of a market; though our labor stands still: 
though our skill be fully adequate to produce the same things ; and 
though we could make them cheaper and better, under a system 
of Protection. 

Nor is this all. Under a Free-Trade system, foreigners come 
here, without tax or condition, to sell labor itself, and art of every 
kind : agricultural labor, on an immense scale, as seen above ; 
manufacturing and mechanical labor of every description, and all 
the arts, useful and ornamental. 

And what is the effect of all this on the labor and arts of this 
country? Clearly our wants, and our ability to consume, are lim- 
ited. All that we buy, in this way, of foreigners, which could and 
would be produced by ourselves, under a system of Protection, is 
so much abatement of the demand for home labor. This is deter- 
mined with all the accuracy of figures and mathematical quantities. 
To the same extent, it checks our advancement in the arts. And 
not the least of the misfortunes is, that, to the same extent also, it 
subtracts from our ability to buy. We are not only so much 
poorer, as we should have been richer by this saving ; but also so 
much poorer as the amount of this unnecessary expenditure. Here 
is the secret of the foreign balances against us, which Free Trade 
invariably brings upon our heads, as shown in another part of this 
work. Nor is it an answer to say, that we must buy, in order to 
sell ; for we have also proved, in another place, that the country 
always trades more with foreign parts under a Protective, than un- 
der a Free-Trade system. 

We are aware it is said, that Free Trade occupies the same po- 
sition, in the great society of nations, which is occupied by any two 
parties, in their commercial transactions with each other, as mem- 
bers of the same society or commonwealth ; and that freedom in 
the former case, is the same as freedom in the latter. This reply 
is defective and fallacious on both points. First, it assumes, that 
the trade in both cases is under a social system, without a break 
of jurisdiction ; and next, that a national protective system does not 
leave the parties, in their commercial transactions, equally free as 
parties trading under one compact society. We will first speak to 
this last point. It is averred, that any two parties disposed to make 
commercial exchanges, should be free to make their own terms, 
under common regulations of society, and that this freedom is es- 
sential to the rights of the parties engaged in commercial exchanges. 
Granted. And who can show, that this is not the case under a n-' 



86 FREE TRADE A LICENSE FOR DEPREDATION. 

tional protective system, regulating foreign exchanges? On ini^ 
point, the cases are exactly parallel. There is no more freedom 
in one than in the other, when the parties meet. Under known 
regulations, in both cases, they make their terms, with no inter- 
ference whatever. 

As to the other assumption, the cases are by no means parallel, 
as the assumption implies. The question is not whether any two 
parties, each living under a national jurisdiction, different from that 
of the other, shall, when they come together for commercial ex- 
changes, freely make their own terms — for this they do equally 
under a Protective or Free-Trade system — but whether one of 
them, occupying a more advantageous position, as to the cost of the 
article in which he trades, shall be permitted, without tax, to enter 
the jurisdiction of the other party, and trade with him, to the disad- 
vantage, perhaps the ruin, of a. third party in the latter jurisdiction, 
who is engaged in producing, or trying to produce, the article thus 
imported, under less advantageous circumstances than the foreign 
producer, and who, for that reason, must fall before the foreigner. 
This is the question. There can be no want of freedom, in any 
case, in the commercial transactions of the parties so engaged, either 
under a Free-Trade or Protective system. But the question is, 
whether a party, under one national jurisdiction, shall be permitted 
in this way, through a second party under another jurisdiction, to 
invade and impair, to ruin it may be, the interest of a third party 
under the latter jurisdiction, and thus to injure the neighbors of this 
third party, and thus to injure the community of which he is a 
member. " If one member suffers, all the members suffer with it." 
And when all the members suffer, not simply from their connexion 
with the others, but in their own proper position, under a common 
misfortune, the state of the body is bad indeed. It is the effect of 
these Free-Trade transactions on third parties, and that alone, 
which constitutes the evil, the injustice. These third parties, which 
sometimes embody a whole people, are thus deprived of their rights, 
and their subsistence is impaired by foreign depredators. 

Thus, the claims of Free Trade are nothing other, nor less, than 
for an open field of depredation, without restriction, on the rights 
of others. Both the principle on which it is founded, and the spirit 
which actuates it, are identical with the principle of anarchy, and 
with that spirit which, in the absence of law, and from the imper- 
fections of the social state, is for ever seeking to take advantao^e of 
the defenceless, and to injure them. 



RISE AND PROGRESS OF FREE TRADE. 87 



CHAPTER V. 

REASONS OF THE RISE AND PROGRESS OF THE THEORY OF 
FREE TRADE. 

The Prevalence of Free Trade makes a Problem. — The Rales by which it is to be solved. 
— British Writers and Literature on this Subject. — The Free-Trade Epoch. — British 
Legislation for Protection, and the Effect of this Policy for a Century previous to Adam 
Smith. — Treatment of the American Colonies under the Crown. — Its Inconsistency with 
Free Trade. — Free Trade in Great Britain a State Policy, not a General Principle. — 
Adam Smith employed by the British Government to write his Book. — His Inconsistency 
and Self-Contradiction. — Examples. — The chief Aim of Adam Smith, was to reconcile 
the American Colonies to Injustice. — Free Trade a British Instinct and Selfish. — M'Cul- 
loch's Betrayal of British Policy. — The Authority of British Writers on Free Trade. — 
Their Authority in our Schools, and in forming the Minds of our Statesmen. — Obsequious- 
ness and Servility of American Free-Trade Economists. — Free Trade a one-legged 
Science. — Born in the Closet. — British Free-Trade Writers Employees of tbe British 
Government. — History of Free Trade as a Party Question in the United States. — Its 
Prevalence here owing to Social Position and Obsequiousness. — Instincts of the Ameri- 
can People in Favor of Protection. — Free Trade can not be the permanent Policy of the 
United States. 

The theory of Free Trade, though it has ramifications, is com- 
posed of a single dogma, and that a mere hypothesis, which, as we 
have shown, has never yet advanced a single inch in its own veri- 
fication, but which has actually been driven from the field, times 
without number, by counter verifications. By a rule of logic and 
of scientific investigation, that an hypothesis is not always to remain 
an hypothesis, it has not now the slightest claim to be entertained 
by a single human being ; for it was originally nothing but an hy- 
pothesis, and is still nothing more. Nevertheless, it has been enter- 
tained for ages, by many men of many nations, and advocated by 
men of distinguished consideration. Unless reasons can be given 
why they should have entertained an error, and so gross an error as 
this appears to be, the fact of their having entertained it, might seem 
to be a formidable recommendation, so far as mere authority governs 
mankind. It is the main object of this chapter to show, in the rise 
and progress of Free Trade, why this false pretension has been so 
long and so extensively received. We propose to make it appear, 
that in all the cases and in all the extent in which the Free-Trade 
hypothesis has been adopted or advocated, the secret of the influ- 
ences which have led to that result, will be found, either in the so- 
cial position or interest of the parties ; or in the pride of science 



88 REASONS OF THE RISE AND PROGRESS 

or in a subservience to authority ; or in a propensity to extravagant 
opinions; or in ignorance and disqualification to appreciate the sub- 
ject. In many cases, perhaps in the majority, two or more of these 
reasons have combined their influence. 

We will begin with the history of this subject in Great Britain. 
In the first place, we would call attention to British literature, and 
o British legislation, on the subject of the protective policy, durino- 
the first century or so of the existence of her protective system. 
Sir James Stewart's work, published in 1769, was the first, in 
what may be called the epoch of Free Trade, which advocated 
that doctrine. Previous to that time, for a hundred years or more, 
nearly all British writers on public economy, such as Child who 
wrote in 1670, Gee who wrote in 1730, Cantillon who wrote in 
1750, Mildmay who wrote in 1760, and others scattered along this 
period, all advocated Protection in the strongest terms, and some 
with great ability. We have elsewhere made extracts from Gee, 
and referred to his confession, that he wrote " by order of the lords 
of trade." His connexion with the government, is, in various forms, 
recognised in his work. A century of such teaching, and a prac- 
tice in legislation corresponding with this doctrine, had taught Great 
Britain the value of a protective system. During this time, from 
six to seven hundred penal laws were enacted, to secure the objects 
of this policy, some of them of great severity. One, for example, 
against exporting a sheep, or a fleece of wool, imposing a forfeiture 
of goods for the first offence, cutting off the hand and nailing it up 
in the town market for the second, and death for the third. Enti- 
cing away artisans and manufacturers, was severely punished. 
The export of machinery was prohibited by forfeiture and other 
penalties. 

By a rigid adherence to this system, from the time it was first 
adopted, down to the middle of the eighteenth century. Great Brit- 
ain was growing rich, and acquiring power, beyond all example, 
either in her own history, or in that of other nations. Holland for 
commerce, and Flanders for manufactures, were already supplanted 
by her, she having borrowed her arts from the latter country, and 
outstripped the former in vending her wares over the world. She 
could not have failed to see her own position already gained, and 
the rapidity of her march in a career of increasing wealth and 
power, nor could she have been ignorant of the cause. 

But she occupied a most important, yet critical position, in rela- 
tion to her North American colonies, which were clamoring for 



OF THE THEORY OF FREE TRADE. ' 89 

protection in their rights, had already set up manufactures in defi- 
ance and evasion of prohibitory laws, and threatened independence, 
at least in the supply of their own wants, as far as they could do 
it. Whatever might be the future political condition and relations 
of those colonies, the far-seeing eye of a British statesman could 
not fail to discern, that the character of British literature on the 
subject of public economy, which had come to have and was likely 
to maintain a leading influence in the world, could not be changed 
too soon ; and the position of Great Britain at the moment, in rela- 
tion to other nations, being, and still shooting, ahead of them all, 
in her manufactures and commerce, was enough to give her states- 
men the hint : " Now is the time to withdraw our own lights, the 
lights by which we have so prospered, from the gaze of the world, 
and hold out new ones for other nations to walk by ; and it is espe- 
cially important to convince our North American colonies, that it 
is their interest to depend on us for manufactures." The same 
argument was equally adapted to accomplish their purpose with 
foreign nations, as with the colonies. 

It is admitted, that this is an hypothetical argument, nor would 
we claim respect for it, any farther than it is associated with prob- 
abihties based upon fact, the character of which as evidence can 
not easily be resisted or denied. Can it be supposed, that British 
statesmen did not see this state of things ; and if they saw it, that 
they would hesitate what to do ? We arrive, then, at a moral cer- 
tainty, that they did see it, and that they did adopt a policy corre- 
sponding thereunto, viz., to withdraw their lights, to be used behind 
a screen for their own purposes, and to hold out others to the world, 
after having put them in blaze. And what are the facts ? Sir 
James Stewart appeared, in 1760, as a Free-Trade writer, and 
Adam Smith, in 1775. The former attracted much attention, 
more, perhaps, for the surprise and novelty of the spectacle, than 
for ability of execution ; but it was soon eclipsed by Adam 
Smith's '* Inquiry into the Nature and Causes of the Wealth of 
Nations." 

In the first place, this work of Adam Smith itself bears internal 
marks of a special design corresponding with the hypothesis now 
under consideration. The first edition must, as we suppose, have 
gone to press, before the war of the American revolution com- 
menced. Even the revised editions show, in many important parts 
of the work, and in all of them having a bearing on Free Trade, 
that the writer had his eye on the colonies, which it was then ex- 



90 REASONS OF THE RISE AND PROGRESS 

pected would be reduced to obedience, with a view to reconcile 
them to the position of being producers of raw produce for the 
mother-country, and to a state of dependence for articles of man- 
ufacture. He panders, like a demagogue, to the assumed taste of 
the colonies ; preaches against monopolies and corporations, of 
which they had so loudly complained ; and in an edition pubhshed 
after the war broke out, is to be found, in the form of inuendo, the 
following shameful proposition ; " That, if to each colony, which 
should detach itself from the general confederacy, Great Britain 
should allow a representation, a new method of acquiring impor- 
tance, a new and more dazzling object of ambition would be pre- 
sented to the leading men of each colony, to draw some of the 
great prizes which sometimes come from the wheel of the great 
state lottery of British politics !" 

In another place he says: " To attempt prematurely, and with 
an insufficient capital, to do all the three," agriculture, manufac- 
tures, and commerce, " is certainly not the shortest way for a 
society, no more than it would be for an individual, to acquire a 
sufficient one. . . The revenue of all the inhabitants of the country, 
is necessarily in proportion to the annual produce of their land and 
labor. It has been a principal cause of the rapid progress of our 
American colonies toward wealth and greatness, that almost their 
whole capitals have hitherto been employed in agriculture. They 
have no manufactures, those household and coarse manufactures 
excepted which necessarily accompany the progress of agriculture, 
and which are the work of the women and children in every private 
family. The greater part, both of the exportation and coasting 
trade of America, is carried on by the capitals of merchants who 
reside in Great Britain. Even the stores and warehouses, from 
which goods are retailed, in some provinces, particularly in Vir- 
ginia and Maryland, belong, many of them, to merchants who reside 
in the mother-country, and afford one of the few instances of the 
retail trade of a society being carried on by the capitals of those 
who are not resident members of it. Were the Americans, either 
by combination, or by any other sort of violence, to stop the im- 
portation of European manufactures, and by thus giving a monop- 
oly to such of their own countrymen as could manufacture the 
like goods, divert any considerable part of their capital into this 
employment, they would retard instead of accelerating the farther 
increase in the value of their annual produce, and would obstruct 
instead of promoting the progress of their country toward real 



OF THE THEORY OF FREE TRADE. 91 

wealih and greatness. This would be still more the case, were 
ihey to attempt, in the same manner, to monopolize to themselves, 
their whole exportation. . . It is thus that the same capital will, in 
any country, put into motion a greater or smaller quantity of pro- 
ductive labor, and add a greater or smaller value to the annual 
produce of its land and labor, according to the different propor- 
tions in which it is employed, in agriculture, manufactures, and 
wholesale trade." 

Not to speak of the defects and inclusiveness of this reasoning 
on certain points, it would be quite unnecessary to declare its aim, 
considering by whom, and in what circumstances, the advice was 
given, on the eve of the outbreak of the American revolution, and 
when the colonies were demanding the right to set up manufac- 
tures, and to engage in commerce, and were forbidden both. Nor 
does this reasoning appear to be very consistent with the principle 
of Free Trade. The facts recognised are very impressive, in 
view of our colonial history. One is amazed, that such prohi- 
bitions and restrictions could have been endured so long ; and not 
less amazed, that they should have been advocated by Adam 
Smith, the father of the Free-Trade philosophy. 

Notwithstanding the laudation of agriculture, above cited, for the 
sake of contenting the American colonists in their condition of 
"hewers of wood and drawers of water" to the parent-country, 
this same author, before he had finished the chapter, could record, 
without compunction, the following sentences : " The profits of 
agriculture seem to have no superiority over those of other em- 
ployments. . . We see every day the most splendid fortunes that 
have been acquired in the course of a single life, by trade and 
manufactures, frequently from a very small capital, sometimes from 
no capital. A single instance of such a fortune acquired by agri- 
culture, in the same time, and from such a capital, has not perhaps 
occurred in Europe during the course of the present century." 

It mattered not whether the colonies should be reduced to obe- 
dience, or prove triumphant ; the same theory of public economy, 
and the same argument, would be applicable, for the objects of 
British policy ; and who will not believe, under all the circum- 
stances, that the theory of Free Trade, which is allowed to have 
derived its grand impulse from the hand of Adam Smith, was 
framed, and the argument made, expressly for the case, under the 
advice of far-seeing British statesmanship? How, it may be 
asked, on any other hypothesis, could it have happened, that this 



92 REASONS OF THE RISE AND PROGRESS 

theory should have been so adroitly put forward in Great Britain 
three quarters of a century ago ; how, otherwise, could it have 
happened that the argument should have been repeated and im- 
proved upon by her greatest writers, from that day to the present, 
calling upon all the world to adopt it, and yet that Great Britain 
herself should have gone steadily on in her old career, without 
relaxing her system of Protection a single whit ? For, we have 
elsewhere shown, that such is ^the fact, not excepting even the 
pretended approximation to Free Trade, under the administration 
of Sir Robert Peel. Did the world ever witness such a spectacle 
of inconsistency, if it be supposed that this was not a profoundly 
devised state pohcy, putting in requisition, and keeping in employ- 
ment, from age to age, the greatest literary talent of the empire ? 

From the time of Joshua Gee we hear no more from the mouths 
of British writers on pubhc economy, of their going to their tasks 
" by order of the lords of trade." This would not do, after the 
policy of our hypothesis was adopted. When it was resolved to 
recommend Free Trade to the world, these connexions between 
the government and Free-Trade writers, were kept out of sight, as 
much as possible. Nevertheless, there are some facts, in the case 
of Adam Smith, bearing on this point, worthy of note. The motive 
proffered, to induce him to vacate his professor's chair, in the 
university of Glasgow, and travel with the young duke of Buc- 
cleugh on the continent, was, as stated in a note of Herron's Ju- 
nius, " upon conditions which assured the philosopher an ample 
independence for his future life ;" and the man who made this offer, 
was Charles Townsend, of whom the same authority says, *' he was 
a man of splendid talents, of lax principles, and of boundless vanity 
and presumption. He had belonged to every party, and cared for 
none." He had been secretary at war under the Bute administra- 
tion, and left the post with discredit. Under Lord Chatham he 
was chancellor of the exchequer ; and under the duke of Grafton, he 
was one of the boldest advocates for the taxation of America. 
While he was a member of the administration, it is remarkable, that 
the sinecure place of " one of the commissioners of his majesty's 
customs in Scotland," was conferred upon Adam Smith, doubtless 
in part redemption of the pledge of " an ample independence for 
future life ;" and this title of " commissioner, etc.," will be seen 
staring out on the titlepage of the early editions of the '* Wealth of 
Nations," for gratitude, or ostentation, or both. That Adam Smith 
was a hcnejiciary of the British government, is evident enough ; and 



OF THE THEORY OF FREE TRADE. 93 

whether he was pensioned to indite matter at the bidding of mas- 
ters, considering all the circumstances of the case, may safely be 
left to the judgment of those who look at these facts. He did not 
begin his work till after he was seduced from his high dignity at 
Glasgow, and stepped into the sunshine of the British crown — first 
indirectly, afterward directly. 

Here, then, in the case of Adam Smith, who occupies the post 
of the great apostle of Free Trade, may be seen enough of his 
social position and in the interest secured to him, to account for 
all his zeal in this cause, and for all his inconsistencies in making 
in argument on both sides of the question. Was he not paid 
for it? 

And how should it happen that nearly all British writers on this 
subject, from Adam Smith down to this time, and nearly or quite 
all the lecturers of the universities, and almost the entire periodical 
press, quarterUes, monthhes, weeklies, and dailies of Great Britain, 
should have become one solid phalanx of Free-Trade advocates, 
while the British government has practised nothing but Protection? 
This, certainly, is a very extraordinary spectacle. It is the in- 
stinct of the British nation, and nothing else — the instinct of self- 
preservation and self-interest. It is their commercial and social 
position in relation to the rest of the world. They know that 
Free Trade practised everywhere else, and Protection practised 
only by themselves, are not only essential to their interests, but 
that it will bring the whole world, all nations, at their feet. 

If it were possible to doubt this great conspiracy against man- 
kind, from Adam Smith down to M'CuUoch, the following extract 
from M'Culloch's own pen, in his Dictionary, proving at the same 
time his fidelity to his patrons, the British government, and his trea- 
son to all other nations, will be sufficient to settle the question : — 

" Our establishments for spinning, weaving, printing, bleaching, 
&c., are infinitely more complete and perfect than any that exist 
elsewhere ; the division of labor in them is carried to an incom- 
parably greater extent ; the workmen are trained from infancy to 
industrious habits, and have attained that peculiar dexterity and 
sleight of hand in the performance of their several tasks, that can 
only be attained by long and unremitted application to the same 
employment. Why, then, having all these advantages on our side, 
should we not keep the start we have gained ? Every other peo- 
ple that attempt to set up manufactures must obviously labor under 
the greatest difficulties, as compared with us. Their establish- 



94 REASONS OF THE RISE AND PROGRESS 

ments can not, at first, be sufficiently large to enable the division 
of employments to be carried to any considerable extent ; at the 
same time that expertness in manipulation, and in the details of the 
various processes, can only be attained by slow degrees. It ap- 
pears, therefore, reasonable to conclude, that such new beginners, 
having to withstand the competition of those who have already 
arrived at a very high degree of perfection in the art, must be im- 
mediately driven out of every market equally accessible to both 
parties ; and that nolJdng hut the aid derived from restrictive regu- 
lations and 'prohibitions y will be effectual to prevent the total de- 
struction of their establishments,'''' &c. 

The passage in italics tells the story, and discloses the doom 
assigned to us, and to all nations, which adopt the Free Trade 
commended to them by the pensioiied economists of Great Britain. 
And this the man, now extant, and rightful successor of the same 
class, in the line from Adam Smith, who, from his pulpit in Lon- 
don, preaches Free Trade to all the world, as the gospel of the 
Gentiles, but designed only to save the Jews. He testifies to his 
brethren, sub 7'osa, as above, that it will save no others, and that all 
nations, except the British empire, will be lost by it. 

The motive of the British government, for such a systematic and 
stupendous fraud, as is here supposed, was a potent one : It was 
to become the richest nation in the world — in that way, the most 
powerful — and to maintain that ascendency. 

It may be true, that the argument of this chapter impeaches the 
discernment of some portion of the American mind, of which one 
could wish to think better. That so many learned doctors and 
statesmen could have fallen so easily into this snare, may, at first 
sight, seem strange. But a moment's reflection will show, that it 
is not at all strange. The stratagem would never have succeeded, 
if it had not been planned to catch them. Public economy, as all 
must feel, who shall have attentively followed us through this vol- 
ume, is one of the profoundest subjects, of an eai;thly origin, that 
ever engaged the human mind. It is but recently, compared with 
the history of most of the sciences, that it has set up a claim to be 
one of them. It can scarcely be said, indeed, that this claim was 
urgently insisted upon, till the hatching of the British state pohcy 
which is alleged above. It was meet, for the purpose in view, that 
it should assume this elevated and commanding position, to excite 
deference and respect, as a mere pretension. Such claims as these 
are not usually scrutinized at once, when they make a descent upon 



OF THE THEORY OF FREE TRADE. 95 

the human mind in such an imposing shape — especially if they 
come from respectable authority. It is natural to receive them in 
faith for a season, when they are accompanied with the sanction of 
great names. It is the habit of the American mind — too much 
so, perhaps — to defer to European, especially to British, authority, 
in matters of science. Is it strange, then, that this pretension, so 
cunningly devised, and backed with names of such repute, should 
have been transiently entertained among us, by the mere force of 
authority ? Certainly it is much more reasonable to suppose this, 
than now, in all the light on this subject, to retain this species of 
faith. 

A word is due to the influence of the pride of science on this 
subject. We have already given reasons to show why public econ- 
omy, hitherto, has had no claim to be dignified with the name of a 
science, and particularly that the Free-Trade hypothesis can not 
possibly be a science, first, because it is a mere hypothesis still; 
next, because all its propositions are empirical laws ; and thirdly, 
because they fall under that category of empirical laws which for 
ever precludes them from being reduced to a science. But, 
in every department of inventive research, will be found men 
of intellectual obliquity, and of loud pretensions, who some- 
times get a theory in their heads, which they baptize with the 
name of a science, as in the case of Free Trade, then mount the 
hobby, and drive it with furious intent. True science, though 
always modest, is undoubtedly a thing of very just pride. As 
public economy has been installed among the sciences by British 
economists, the more extravagant the pretension, as to form and 
substance, so much the more captivating is its influence over that 
class of persons to which we have alluded above. Sobriety would 
as little suit their taste, as the labors of a genuine science would 
suit their habits. They want something that will strike the fancy, 
something that will prove itself; they want the philosopher's stone 
that will turn everything into gold ; and this they find in Free 
Trade. It is a beautiful theory to such minds ; what could be 
more charming? Besides, it costs nothing in the way of verifica- 
tion ; for it has but one proposition. It is a science that stands on 
one leg. It never budged an inch, and never can, as such. Never- 
theless, it is very captivating to those who think it is a science, and 
they dance around it, chanting their hymns of satisfaction, and do- 
ing homage as to a symbol of mystic import. Did ye never witness 
the exceeding delight, the ecstacy of these savans, and with what 



96 REASONS OF THE RISE AND PROGRESS 

airs of triumph they put to you their one-legged concern? They 
evidently think it a perfect beauty ; it is a science, they say. Born 
in the closet, these notions have been transferred from one closet 
to another, and re-elaborated there, by the brains of every succeed- 
ing theorist, with all the fervor and satisfaction of scholastic pride, 
without the slightest knowledge of the practical operation of these 
principles in the common affairs of hfe. Like greenhouse plants, 
which perish before the rude action of the changing seasons, when 
exposed, so these Free-Trade principles, applied to the practical 
concerns of the commercial world, bring forth nothing but unripe 
or blasted fruit. 

Men are sometimes found in eminent positions, even in connex- 
ion with our colleges and universities, who are compelled to borrow 
the capital of ideas in which they trade, in the way of teaching and 
writing. This capital, so far as this subject is concerned, as before 
shown, is furnished to their hands, in the greatest abundance, by 
British authorities. We have seen how it began to be formed, 
nearly a century ago, under the auspices of Adam Smith ; what 
state reasons existed for laying this foundation ; how it has been 
carefully husbanded, from that time to this, as a British state poli- 
cy ; how the greatest talent of the British empire has been seduced 
into this service, and kept industriously employed ; and how this 
feeling — a mere feelins: — has become an instinct of the British 
nation, that Free Trade in all the world is necessary to their pre- 
eminence. Nor do they preach this doctrine insincerely, though as 
yet they have never practised it ; but they are prepared for it, as 
shown in the extract from Mr. M'Culloch above, and as we have 
shown in a subsequent chapter, as soon as a general consent can 
be obtained. They have gained a position which enables them to 
afford it, and which will insure their advantage, their ascendency, 
over all other nations, on a Free Trade platform. This vantage- 
ground has been the constant aim of British statesmen for seventy- 
five years. Their writers, and their press in all its forms, during 
this period, have made the best argument that could be made ; and 
their example has seduced many continental writers, and some por- 
tions of the continental periodical press, into their footsteps. There 
is no nation, whose authority in learning and science, is more com- 
manding than that of Great Britain — none, certainly, more impo- 
sing in relation to us, who are of the same family, and who speak 
the same language. When we borrow ideas from any quarter, we 
more naturally borrow from that. All the most eminent British 



OF THE THEORY OF FREE TRADE. 97 

authorities on public economy, are no sooner out of the press in 
London, than they appear here. Thence our economists, for 
the most part, borrow their capital on this subject ; and our schools 
and colleges are greatly influenced, and swayed by these two com- 
bined agencies, foreign and domestic. Here is to be observed the 
action of the simple, but potent principle of subservience to author- 
ity, laid down as one of the rules at the beginning of this chapter, 
to determine the reasons of the rise and progress of Free Trade. 
Ignorant of that great state policy which brought these works into 
existence in Great Britain, Americans become its victims, where 
they think they are getting a science all made at their hands. We 
will not say the subserviency, but the servility with which these 
notions of Free Trade have been copied in this country from Brit- 
ish authorities, by Americans occupying eminent places in our 
seminaries of learning, and who have propagated them to the ex- 
tent of their abilities and influence, is not simply a subject of regret 
for the evil which it does to the country, but of humiliation at the 
sight of such obsequiousness. 

From this higher department of the American mind, as it has 
been brought into action on this subject, we are forced to descend 
for a moment, though with regret, into the arena of party politics, 
to see, if the prevalence of Free-Trade principles in that quarter, 
can be accounted for by one or more of the rules laid down at the 
beginning of this chapter. We believe, that the instincts of the 
American people, left to themselves, are necessarily on the side of 
Protection, and that nothing but some special and unnatural cause, 
some violent shock, could have carried them over, even for a tran- 
sient period, to the other side. The entire mass of the free labor 
of this country feels, and has ever felt, that it can not and will not 
be placed side by side with the pauper labor of Europe, to be fed 
and clothed as that is fed and clothed, to be housed as that is 
housed, and starved as that is often starved. Yet Free Trade pro- 
poses this — we say, proposes it — because, if figures do not lie, it 
must necessarily lead to that result. How, then, has it happened, 
that a great and for a long time dominant party of this country 
should have adopted, and put into operation, by their chiefs and 
leaders, the doctrines of Free Trade as a public policy? We 
propose to answer this question, under the guidance of the rules 
we have laid down. 

A mere accident in our political history, but a very comprehen- 
sive and momentous one, has contributed more, perhaps, than any 
7 



98 REASONS OF THE RISE AND PROGRESS 

OP all things else, to propagate among the people of this country, 
for a season, the influences of the Free-Trade theory. We mean 
the accidental position of the chief magistrate of the United States, 
arising, in 1831, out of a personal feud between him and the vice- 
president. The president, in vindicating the executive authority, 
in the critical emergency of the country that followed, went so far 
as to render it convenient to himself, as a candidate for re-election, 
to appear afterward to recede somewhat, till he was supposed, ap- 
parently with justice, to have taken ground for Free Trade ; and 
his unbounded popularity carried his party with him in that direc- 
tion. For the first time, in the history of the country — it may be 
hoped for the last — this great American question, which ought 
for ever to unite all Americans, became, most unnaturally, a party 
question, and has been maintained as such, from that time to this, 
though with a manifest decreasing zeal for the Free-Trade cause 
among the people. To prove that this revolution in popular opin- 
ion was caused, first, by the social position of the president, and 
next by his authority over the party, it is only necessary to observe, 
that, down to that time, both he and they were among the soundest 
and strongest protectionists which the country has ever had in its 
bosom. The causes of the change, therefore, were undoubtedly 
purely moral, being a change of social position with the president, 
and subservience to his authority in his party. It is altogether 
unnatural, that any portion of the people of the United States 
should be the advocates of Free Trade, as all their instincts must 
necessarily be against it, when the subject is understood by them. 
It is not only the great question of the age, but it is emphatically 
an American question. It is the position and interests of the Uni 
ted States which have made it the question of the age, more than 
all other causes. European, especially British statesmen, know 
well, and have long foreseen, that, if freedom is not suppressed 
here, it will grow up there, and that freedom consists, as we have 
maintained in a subsequent chapter, in the great strife of the world 
for the rights of labor, for commercial rights, for the enjoyment and 
independent control of commercial values by those who create 
them. The great aim of British statesmen is to bring American 
labor down to the same level with European, which can only be 
accomplished by a system of Free Trade. 

But this accidental and relative position of the two great political 
parties in the United States, on this question, induced as above 
stated, and which can hardly, in the nature of things, endure long, 



OF THE THEORY OF FREE TRADE. 99 

has forced the people to act upon it, in the great political contests 
of the country, before they understood it. It is a question, in the 
consideration of which, if the people generally are forced to go 
farther than its simplest forms, where their instincts will decide for 
them, and decide most safely, infallibly, their minds will be embar- 
rassed, and they will be compelled to rely on one of two modes of 
decision : — either to trust to their party leaders, or to wait till ex- 
periment shall prove in which of the two courses of public policy 
their true interests lie. This is precisely the position, unfortu- 
nately, in which the people of the United States have been placed, 
by making this question a party one. Neither the people, nor 
their party leaders, as a body, have understood the subject. That 
was impossible. And nothing of the merits of the question was 
ever decided, in the result of popular elections, so far as it was in- 
influenced by it, except as the people were instructed by experi- 
ence, as for example in 1840. All other influences have been 
those of authority only. 

Without having the remotest idea of the real character of Free 
Trade, in its practical operations, the people, very extensively, have 
been made to believe, that it means to buy where you can the 
cheapest, and sell where you can the dearest, which is very natur- 
ally thought to be right; and that protection is a tax, which every 
one naturally objects to. In this view of the subject, which we 
have elsewhere proved to be incorrect, it is not strange that dema- 
gogues, and a party press devoted to Free Trade, under the aus- 
pices of one of the most popular chieftains that ever swayed the 
sceptre of chief magistracy in the United States, should have led 
off a majority of the people, for a season, to believe in this doctrine, 
till convinced of their error by sad experience ; nor is it strange, 
that the same mode of reasoning should still continue to have its 
influence, so long, unfortunately, as this is made a party question. 
But, as it is, in fact and properly, an American question, in relation 
to the foreign world, and has unnaturally been forced into the posi- 
tion of a domestic controversy, it can not always be held there. 
Sooner or later, the people are doomed to learn by experience, 
that the protection of American labor and arts, against foreign labor 
and arts, is indispensably necessary to their true interests. 



100 GREAl BRITAIN ALONE PREPARED FOR FREE TRADE 



CHAPTER VI. 

GREAT BRITAIN THE ONLY NATION THAT IS PREPARED FOR FREE 
TRADE, AND THE UNITED STATES THE LAST THAT CAN AF- 
FORD IT. 

The Importance of Position, in all Competition, illustrated by familiar Examples. — Adam 
Smith's Illustration. — The Tribe or Nation that is ahead in Manufactures, can keep ahead, 
by Free Trade. — The first Lessons on Protection to Great Britain. — The Way of her 
Beginning, and its Results. — It was by this System that she was able to triumph over 
Napoleon. — Great Britain was Poor when she began her Protective System. — Behold 
the Consequences. — Great Britain always consults the Parties interested in Protection, 
and complies with their Wishes. — Not so the United States. — A remarkable Example of 
turning Witnesses out of Court. — British Manufacturers, from the Strength of their Posi- 
tion, have consented to dispense with Protection. — M'Gregor's Evidence and Advice to 
the British Government. — M'Culloch's Confession. — Action of the States of Europe, after 
the Overthrow of Napoleon, in Favor of Free Trade. — Their Repentance. — Repent- 
ance of Russia. — Manifesto of Count Nesselrode. — The ZoU-Verein Treaty. — Napoleon's 
Policy. — The Policy of the European Continental Nations against Great Britain, defen- 
sive. — The greater Cost of Money and Labor in the United States an insuperable Bar 
to Free Trade. — The Weak, not the Strong, require Protection. — British Free Trade, 
not Free Trade. — British Differential Duties retained. — Effect of Commercial Treaties. 
—The Whole Truth in few Words. 

As great things are illustrated by small, and things remote by 
those which are near and more familiar, we shall probably approach 
the main points of the subject of this chapter, with more advantage, 
and in clearer light, through examples with which most persons 
are familiar, and which all will be able to appreciate. 

A man who has acquired a standing in any trade or commercial 
business, has an advantage over one who is just setting up. Who 
does not see that? An apprentice, who has worked but a little 
while at his craft, can not do so well as an accomplished journey- 
man. One mechanic is often preferred to another, because he is 
more skilful, and turns off better work ; and one of two, equally 
skilful, will outdo the other, and get more custom, because he has 
more capital, and can make more display, and more noise, to at- 
tract attention. Position, in every trade and business, relative to 
others in the same pursuit, is much — -is often everything for rela- 
tive advantage, in the way of competition ; and skill and capital 
are always of great account. By time, application, skill, capital, 
and position^ one is constantly taking lead of another, in a kindred, 
or in the same pursuit. Who does not know the position of Stew- 



UNITED STATES LEAST PREPARED OF ALL NATIONS. 101 

art, in New York, as an importer, jobber, and retailer of fancy 
and other dry goods? It has taken him a long time to acquire 
that position. He has worked for it, taken great pains, acquired 
great skill and taste, and from a small beginning, has grown rich ; 
has erected a magnificent marble edifice, with sumptuous fittings; 
employs a hundred clerks ; has reduced everything to system, to 
go like a clock ; and he is able, by all his experience, with his 
capital, and by blending importing with jobbing and retailing, to 
sell a little cheaper, and a little better. So, at least, it is believed ; 
and that is enough. His position is without a rival. Nobody can 
compete with him. 

Stewart, among the New York merchants of the same class, is 
like Great Britain among nations. He necessarily keeps in check 
others, who, but for him, would rise. It is admitted that it is hard 
for others, in the same line of business, to stand up against him, 
and that they suffer great disadvantage from the superiority of his 
position. 

It is singular, though characteristic, that Adam Smith, in arguing 
against a protective system — he is at one time on one side, and at 
another on the other side — should have advanced the very princi- 
ple we are now endeavoring to elucidate as constituting the neces- 
sity of such a system. He says : " A rich man, who is himself a 
manufacturer, is a very dangerous neighbor to all those who deal 
in the same way." We not only grant Adam Smith his principle, 
here laid down, but we claim and appropriate it. Great Britain 
occupies, in relation to her neighbors, to all other nations, precisely 
the position of Adam Smith's " rich manufacturer." She " is a 
very dangerous neighbor to all those who deal in the same way." 

It is never true, that the strong want protection against the weak ; 
but it is always true, that the weak want protection against the 
strong, whoever may be the parties, or whatever the particulars in 
which one is strong and the other weak. In the present case, the 
parties are nations, and the subject of comparison is the state of 
their manufactures. That nation which is most advanced, and oc- 
cupies the strongest position, in this respect, has the advantage over 
all others, and will certainly beat them, unless they protect them 
selves, in proportion as they are behind and weaker. This is the 
case from the first remove from a state of barbarism, to the highest 
attainments of civilization. The tribe that starts first in any manu- 
facturing art, will have the advantage over the neighboring tribes 
which have done nothing in this way, and will desire that the latter 



103 GREAT BRITAIN ALONE PREPARED FOR FREE TRADE : 

should remain where they are as producers of the raw materials. 
The manufacturing tribe will be in favor of Free Trade, because, 
in that way, it can make the other tribes dependent for those fine 
things, which will be wanted as soon as they are seen, but which 
can not be produced at home, because they do not know how to 
do it. They must, therefore, work, and pay with much labor for 
that which costs the manufacturing tribe but little ; nor can the 
other tribes ever come into competition, under a system of Free 
Trade. They will require a protective system, not only to start, 
but as long as they are behind their more skilful neighbor. Supe- 
rior skill, in this particular, is superior strength, which nothing can 
balance but the protection of the weaker party. 

Great Britain began a new career, some two hundred years ago, 
or more, then a poor nation — at least not rich — with her protec- 
tive system, under the teachings of Sir Josiah Child, Joshua Gee, 
and others of their school. She found, as these men taught her, that 
for want of a protective system, other nations were drawing away 
her cash. The doctrine on which she then began to act, will be 
understood by the two propositions, on which Joshua Gee, who 
wrote, as he said, " by order of the lords of trade," founded his 
work. They are as follows : " 1. That the surest way for a nation 
to increase in riches, is to prevent the importation of such foreign 
commodities as may be raised at home. 2. That this kingdom is 
capable of raising within itself, and its colonies, materials for em- 
ploying all our poor in those manufactories, which we now import 
from such of our neighbors as refuse the admission of ours." This 
author gave an account of the trade of Great Britain with all parts 
of the world, and showed where protection was demanded, and 
should be applied, to check unfavorable, and bring favorable bal- 
ances. The protective system of Great Britain, appears to have 
been begun in earnest about this time, not far from the middle of 
the first half of the seventeenth century. Previous to that time, 
some of the continental nations were much ahead of her in man- 
ufactures ; such as France, some parts of Italy, and particularly 
Flanders, directly opposite, on the other side of the channel — all 
which drained her of cash, to a most inconvenient extent. One of 
the first steps of reform was to import sheep from Flanders, and to 
persuade Flemish manufacturers to come along with them ; after 
which, when wool w^as grown at home, and manufactures of wool- 
len were set up, under protective laws, severe penalties were enacted 
against the export of sheep or wool, for the second offence cutting 



UNITED STATES LEAST PREPARED OF ALL NATIONS. 103 

off the hand, and for the third death, which are still on the statute- 
book, though not in force. Joshua Gee's doctrine was no sooner 
reduced to practice, than its charm and power were profoundly and 
comprehensively felt, in the increase of private and public wealth 
The protective policy then began to be applied in all directions, 
and soon grew up into a system, till Great Britain finally became, 
in the eighteenth century, a great manufacturing nation. She had 
emerged, by the influence of this system, from a state of depend- 
ence on other nations, to independence, and in turn, began to make 
other nations tributary to her, as she had been to them. It was the 
vitality and power of this system, which sustained her under all the 
burdens of her expensive wars, in the eighteenth century, still rising, 
and still expanding her strength and power by the same cause. 
Her power was in her arts, and by her machinery one man did 
the work of two hundred, so that a nation of twenty-five millions 
of people, was equal to one of hundreds of millions. It was by 
her protective system, that she was enabled to sustain herself 
and her continental allies, for so many years, and with such un- 
shaken firmness, against the gigantic power of Napoleon ; and it 
was by this that she finally triumphed. 

It need not be said, that Great Britain is now the richest and 
most powerful nation in the world, and she probably commands 
more active capital than all the rest of Europe. No matter for her 
national debt, as it is all owned by her own subjects. She is none 
the poorer for that; but the fact, that her credit has never failed, 
and still continues firm, under the burden, makes of it an additional 
evidence of her immense and untold wealth. She commenced her 
protective system, in the seventeenth century, if not a second rate 
nation, as to wealth and commercial greatness, at most on a par 
with many other nations. In less than a century, she began to 
display her superior strength ; and in one hundred and fifty years, 
her commercial credit was a match for the whole world. During 
all this time, her protective policy was never relaxed, but was 
steadily improved and extended, till it embraced every commercial 
interest of her subjects, in relation to foreign parts. Her board of 
trade has always been the medium of communication between the 
interests of her people and public legislation regarding those in- 
terests ; and no manufacturing art or enterprise ever asked protec- 
tion at her hands, without receiving it ; nor was protection ever 
taken away from any, without the consent? of those engaged in it, 
the case of the corn laws excepted. She has ever been wise 



104 GREAT BRITAIN ALONE PREPARED FOR FREE TRADE . 

enough to consult, through her board of trade, the wishes of the 
parties concerned, as being the best and most competent judges of 
the amount of protection wanted, or whether any was wanted — a 
remarkable contrast to a fact that occurred in the history of the 
twenty-seventh congress of the United States, when, on motion of 
the Hon. J. P. Kennedy, that a committee be appointed to take 
evidence for the adjustment of the subjects and rates of duty in the 
tariff of 1842, a member from Tennessee moved an amendment, 
that no evidence should be received from manufacturers ! That is, 
that the only witnesses acquainted with the facts, should be ex- 
cluded from court ! 

By means of this system of protection in Great Britain, opera- 
ting for two centuries, with constant improvements and addi- 
tions, as occasions required, the British manufacturing arts have 
acquired a perfection of skill, and a strength of position, which 
those of no other nation can rival, and before which the latter must 
fall, on a basis of Free Trade. The British government have long 
been aware of this ; and as shown in the preceding chapter, have 
been aiming at this, for more than half a century, by the employ- 
ment of a pensioned corps of Free-Trade writers of consummate 
abilities, whose doctrines, like British manufactures, are fabricated, 
not for home consumption, but for foreign use, and for foreign 
markets. 

As above remarked, the British government has always imposed 
duties on manufactured goods competing with their own, at the 
request of the manufacturers, and has never reduced or removed 
them, without consent of the interested parties. It was not till 
within a few years that the British manufacturers have felt their 
position to be strong enough to do without protection. In 1839 
and 1840, the deputations of the manufacturers who annually ap- 
pear before the board of trade, to represent their respective in- 
terests, and as witnesses of fact on this great question, expressed 
to the board their willingness to give up the protection that had 
been afforded them, the manufacturers of glass and silk only de- 
clining to concur. Precisely in accordance with this representation, 
the protective duties have since been abolished, except in the cases 
of glass and silk, which are retained. 

It is easy to see — it is, indeed, a simple matter of recorded fact 
— that there has been an understanding between the British man- 
ufacturers and their government, on the subject of the abolition of 
protective duties, as much as before, in their enactment, measure. 



UNITED STATES LEAST PREPARED OF ALL NATIONS. 105 

and continuance. Both parties had come to the knowledge, that, 
on account of the perfection of the British manufacturing arts, of 
their superiority in skill over those of other nations, and on account 
of the position which they occupied in the hands of great capitalists, 
there was no risk in this abolition of protective duties. They had, 
indeed, an exact measure of the risk in the gauge of duties realized 
from this source, which had come to be trifling, and were the re- 
sult of accident, or of any other cause than that of competition in 
trade. It was also well understood, what would be the moral 
effect on the world, by this course of procedure ; that, on this 
basis, they could set up a challenge for Free Trade to all nations, 
with the show of an example ; that they could say, we have be- 
come converts to our own writers (pensioned for that very purpose) 
on public economy ; and above all, it was well understood, that 
the acceptance of this challenge by other nations, would result in 
the sole advantage of the party which threw down the glove, and 
the overthrow and ruin of those who should take it up. The 
position of the challenging party, was one of conscious strength and 
superiority. Both the government and the manufacturers knew, 
that no nation could compete with them, on a platform of Free 
Trade, because all other nations were, some an age, and some a 
century, behind them, in skill, and in strength of position ; and they 
knew, that such opponents would require, at least equal time and 
equal chances as had been enjoyed in Great Britain, under a system 
of protection, to be prepared for such a strife. 

There was another great and important understanding between 
British manufacturers and the British government, in the adoption 
of this measure, viz., the abolition of the corn laws. These laws 
were the only obstacle in the w^ay of the complete triumph of 
British manufactures over all the world, on the basis of Free Trade. 
It had been seen, that British arts and British capital were going 
abroad, to set up where food was cheaper, and vie with the 
home arts and home capital. M'Gregor, one of their highest 
authorities, and who had been made a principal witness before the 
committees of parliament on this subject, had told them, that, 
"from $20,000,000 to $25,000,000 were annually drawn from the 
kingdom, by persons of fortune, who go to France, Italy, Switzer- 
land, and other parts of the continent, where they can live better, at 
less expense than at home. Now," said M'Gregor, "provided 
our commercial system were of a more enlightened character, 
I free trade in corn], measures w^ould speedily be adopted, whi:h 



106 GREAT BRITAIN ALONE PREPARED FOR FREE TRADE I 

would have the effect of assimilating the prices of necessaries in 
England and on the continent. There is at present nothing to 
stop the progress of manufacturing industry on the continent of 
Europe ; and time only is required to enable foreign manufac- 
turers to produce a sufficient supply of goods to supplant us. We 
might, in every manufacture we now possess, meet foreign coun- 
tries in every market of the world, and in most instances, undersell 
them." Another writer adds: "We allow the resources which 
would enable us to accomplish this, to be counterbalanced by pro- 
tecting duties on the importation of food." And their present great 
pensioner, M'Culloch, who preaches one doctrine for home, and 
another for foreign parts, says in his commercial Dictionary : " Our 
establishments for spinning, weaving, printing, bleaching, etc., are 
infinitely more complete and perfect than any that exist elsewhere, 
etc." See pp. 93 and 94 for this important extract. 

Here, as need not be said, the plan is fully disclosed, confessed, 
promulgated — not, indeed, for the advice of foreign nations, though 
it transpires incidentally — but as an incitement to domestic legisla- 
tion. M'Culloch, who knew, has told the exact truth, which brings 
us to one of the main points of this chapter, viz., that Great Britain 
is the only nation prepared for Free Trade. To install her man- 
ufacturing arts in this impregnable position, she has made one great 
sacrifice, that of her corn laws. 

It will be seen, therefore, that this abolition of duties on man- 
ufactures, and on bread-stuffs, vaunted forth as Free Trade to all 
the world, is in the direct line of her policy of protection, sustained 
for two hundred years, by which she has become the richest and 
most powerful nation in the world, and that It is all done on the 
principle of protection ; that is, to protect and further her own 
interests, and the interests of her manufacturers and artisans, against 
all the world. Great Britain had arrived at the point, in her com- 
mercial history, when Free Trade, in these particulars, was her 
true policy, as much so as protective duties had formerly been. 
Protective duties once, and the abolition of them now, so far as 
carried out, are both based on the same principle, viz., interest, 
policy, demonstrated by taking up a position adapted to a change 
of circumstances, in relation to the rest of the world. Great 
Britain was not only prepared for this modification of her policy, 
by having shot far ahead of all other nations in her manufacturing 
arts ; but with this advantage, on the basis of Free Trade as a 
general rule among all commercial states, she could distance them 



UNITED STATES LEAST PREPARED OF ALL NATIONS. 107 

yet farther and more rapidly than before, as they would have no 
Protection against her, when she no longer needed it for herself 
against them. It would be the skilful contending against those 
who are less skilful ; the strong against the weak ; the well-fortified 
in their position, against those who have yet to gain a position ; the 
issue of which could not be doubtful. 

It remains to show, that Great Britain is the only nation prepared 
for Free Trade — or rather to show it more clearly, as it can not 
but be in part manifest already. It is remarkable, though not gen- 
erally known, that, although Great Britain had been preparing the 
way for more than half a century, by her pensioned writers on pub- 
lic economy, for the proposal of Free Trade to the world, it was 
never whispered from her public functionaries and statesmen, till 
within a few years. The thorough doctrine of Free Trade, in- 
deed, was never promulgated to the world, till after the battle 
of Waterloo ; which event is not mentioned as having any con- 
nexion with this full disclosure, but as an epoch of European 
history, subsequent to which, some efforts were made, by the 
states of Europe, for a more liberal commercial intercourse with 
each other, secretly instigated by the British cabinet. Russia 
plunged into it headlong, in 1818, and was obliged to tread back, 
in a great effort for her own rescue, in less than four years. In 
a public document, of 1822, from Count Nesselrode, Russian prime 
minister, we find the following graphic description of the state of 
things in that empire, produced by the relaxation of their protective 
policy: "Agriculture without a market, industry without protection, 
languish and decline. Specie is exported, and the most solid com- 
mercial houses are shaken. The public prosperity would soon feel 
the wound inflicted on private fortunes, if new regulations did not 
promptly change the actual state of affairs. Events have proved, 
that our agriculture and our commerce, as well as our manufac- 
turing industry, are not only paralyzed, but brought to the brink 
of ruin." The remedy was promptly applied, the protective poHcy 
was re-established, and now reigns, in that empire, more firmly 
than ever. The Zoll-Verein treaty of the German states, formed 
for mutual protection against Great Britain in particular, and against 
the world generally, is the result of the same necessity. They 
have found it necessary to have systematic, as well as permanent 
protection. The following citation from a speech in the British 
parliament, delivered some ten years after the peace of Europe, is 
instructive here ; and certainly it is frank : " It was idle for us to 



108 GREAT BRITAIN ALONE PREPARED FOR FREE TRADE I 

endeavor to persuade other nations to join with us in adopting the 
principles of what was called ' Free Trade.' Other nations knew, 
as well as the noble lord opposite, and those who acted with him, 
that what we meant by ' Free Trade,' was nothing more nor less 
than, by means of the great advantages wo enjoyed, to get a monop- 
oly of all their markets for our manufactures, and to prevent them, 
one and all, from ever becoming manufacturing nations. When 
the system of reciprocity and Free Trade had been proposed to a 
French embassador, his remark was, that the plan was excellent in 
theory, but, to make it fair in practice, it would be necessary to 
defer the attempt to put it in execution for half a century, until 
France should be on the same footing with Great Britain, in ma- 
rine, in manufactures, in capital, and the many other peculiar ad- 
vantages which she now enjoyed. The policy that France acted 
on, was that of encouraging her native manufactures ; and it was a 
wise policy ; because, if it were freely to admit our manufactures, 
it would speedily be reduced to the rank of an agricultural nation ; 
and therefore a poor nation, as all must be that depend exclusively 
upon agriculture. America acted, too, upon the same principle 
with France. America legislated for futurity, and was prospering 
under this system. In twenty years America would be independent 
of England for manufactures altogether. . . Since the peace, France, 
Germany, America, and all other countries, had proceeded upon the 
principle of encouraging and protecting native manufactures." 

Napoleon established manufactures in France as they had nevei 
before existed there, and it is still found necessary to protect them. 
The more that Great Britain makes her demonstrations of Free 
Trade, so much the more does every nation in Europe find it 
necessary to protect itself — to stand on the defensive — as she 
occupies a position from which she can beat them all. Neverthe- 
less, there is a substantial equality among all European nations, as 
to the joint cost of money and labor, which are the tw^o comprehen- 
sive elements of every commercial system, and the two powers em- 
ployed in the commercial strifes of nations. On this account, if 
Free Trade would do anywhere, it would do among and between 
European nations. But it will not do even there. Much less will 
it do between Europe and the Urtited States, when the joint cost 
of money and labor in this country, is more than a hundred per 
cent, greater than their cost in Europe, being so much against us ; 
and for which there could be no possible compensation, under a 
system of Free Trade, not to speak of the imperfect state of our 



UNITED STATES LEAST PREPARED OF ALL NATIONS. 109 

manufacturing arts, as compared with those of Europe, and more 
especially of Great Britain. 

It is this difference of cost of money and labor in the United 
States, as compared with their cost in Europe — the necessary 
consequences of which are abundantly considered in subsequent 
chapters of this work — it is this, we say, which establishes the sec- 
ond proposition at the head of this chapter, to wit, that the United 
States are the last nation that can afford Free Trade. As long as 
this difference exists, that is, as long as the states of society in these 
two quarters are so different — which is the same thing, or rather 
the cause of the difference in the cost of money and labor- — the 
United States can never afford Free Trade. Free Trade must 
necessarily annihilate this difference in the states of society, not by 
bringing up European society to the American standard, but by 
reducing the latter to the level of the former, by the annihilation of 
the difference in the cost of money and labor. It is elsewhere 
shown, that the great thing to be maintained by a protective system 
in the United States, is American freedom, which consists in main- 
taining the rights of labor ; that this was the great and sole object 
of the American revolution, and all that was acquired in the estab- 
lishment of American independence. Grant that the United States 
can afford to lose all this, then it is conceded, that we can afford 
Free Trade. 

Some further light may be thrown on this subject, by consider- 
ing the position into which American manufactures, as a whole, 
would be thrust, on a basis of Free Trade, and the position into 
which the separate establishments would be thrust, under the influ- 
ence of the same cause. As a whole, they w^ould be positively 
injured, crippled, by the superior, more advantageous, and more 
commanding position of British and other foreign manufacturing 
arts, not to speak of the difference in the cost of money and labor, 
which is the most potent cause of all. They would be curtailed, 
restricted, and impaired. The home demand for the agricultural 
products of the country — which, as shown in another chapter, is 
by far the best market in every respect, but more especially in the 
amount of consumption — would be instantly and greatly curtailed, 
continually diminishing ; the great cause of private and public 
wealth, arising from multiplying arts and kinds of labor, would 
cease to operate; and investments of capital in home manufactures, 
would be checked, abridged, and greatly diminished, by the ne- 
cessity of diverting it to other channels. But the most calamitous 



110 GREAT BRITAIN ALONE PREPARED FOR FREE TRADE 

effect would fall on the weaker manufacturing establishments. Low- 
ell, and some other manufacturing towns, equally strong in their 
position, might, and probably would stand, and be able to breast 
the storm, positively weaker, but relatively stronger, in conse- 
quence of the overthrow of innumerable infant establishments, 
which a protective system had started, and which nothing but a 
protective system can sustain. The general prosperity and wealth 
of the country depend more on these small and weak establish- 
ments, than on the great and strong ones, because as a whole, they 
have more capital in them, employ more labor, and give a greater 
amount of activity to the industry of the whole people. The weak 
are naturally allied to the weak, and they stand or fall together ; 
while the strong are comparatively independent, and can stand of 
themselves. That public policy which protects, the weak, protects 
all, and is the best possible policy. Is it to be supposed, that the 
almost innumerable small and weak manufacturing crafts of this 
country, in the infancy of their existence, and with all the imperfec- 
tions of their arts, can maintain their position, against the superioi 
and more perfect arts of Great Britain, on a basis of Free Trade, 
when, besides this disadvantage, itself enough to crush them, Amer- 
ican manufacturers have to pay twice as much for money and la- 
bor ? It is preposterous to suppose it can be done. 

While, therefore, the strong manufactures of the United States 
might possibly be able to stand, even on a basis of Free Trade, it 
could not fail to happen that the weaker would fall before the crush- 
ing influence of foreign skill and power of capital, the general effect 
on all the great and minor interests of the country, would be most 
disastrous, as is abundantly shown in other chapters. The strong 
would become relatively stronger, and the weak weaker ; the rich 
richer, and the poor poorer ; while the nation, as a whole, would 
be impoverished. Every separate manufacturing enterprise occu- 
pies, commercially, an isolated position, and can lean only on itself, 
when the policy of protection is withdrawn. It, therefore, becomes 
the victim of the whole power of this foreign influence, as much as 
if there were no other manufacturing establishment in the country. 
If, therefore, it is weak, can it stand ? Its fall is inevitable. 

But, in order to have a just view of the Free Trade alleged to 
have been granted by Great Britain, under the administration of 
Sir Robert Peel, it is equally important as pertinent here, to observe, 
first, that the Free Trade granted, is no sacrifice to the party grant- 
ing it ; nextj that the grant is limited and small ; thirdly, that it is 



UNITED STATES LEAST PREPARED OF ALL NATIONS. Ill 

a discriminating Free Trade, granted only where it would operate 
as protection ; and therefore, fourthly, that it is no Free Trade at 
all, but a mere matter of public policy, to operate in favor of the 
interests of Great Britain, and against the interests of other nations. 
The condensed view of facts, in the note below, collated by the 
careful hand of Mr. Edwin Williams, in Fisher's National Maga- 
zine, September, 1846, fully sustains and verifies the four proposi- 
tions above asserted.* 

* The appointment of a select committee of the house of commons in 1840, on 
import duties, was the commencement of a new era in commercial legislation. 
The severe scrutiny to which the principles of the tariff were exposed by this 
committee was followed in two or three successive years, including 1845, by some 
very useful amendments, to which may be added the additional amendments 
adopted by the bill introduced the present year by Sir Robert Peel, and now 
passed into a law. An abstract of the report of the Import Duties committee, in 
1840, showed that while 94| per cent, (or £21,700,630) of the total revenue from 
customs (£22,962,610) was obtained from seventeen articles, there were above 
eleven hundred articles subject to different rates of duty, which, in the language 
of Mr. McGregor, of the board of trade, were "burdens, restrictions, and delays, 
upon the industry and prosperity of the country." 

"The following is a list of the seventeen articles referred to, each producing 
more than £100,000 to the revenue : — 

Am't Duties. 

1. Sugar and molasses £4,827.018 

2. Tea 3,658,800 

3. Tobacco 3.495.686 

4. Rum, brandy, &c 2,615.443 

5. Wine 1,849.700 

6. Timber 1,603.194 

7. Corn (grain, flour, &c.) 1,098,779 

8. Coffee 779,114 

9. Cottonwool 416,257 



Am't Dvities. 

10. Silk manufactures £247,362 

11. Butter 213,077 

12. Currants 189,291 

13. Tallow 182,000 

14. Seeds 145,323 

15. Sheep's wool 139,770 

16. Raisins 134,589 

17. Cheese 100,521 



Seventeen articles producing duties 21,700,630 

"In 1842, Sir Robert Peel reduced the duty on about seven hundred and 
fifty different articles, which had yielded only £270,000 to the revenue. At the 
same time he totally abolished the duty on other articles, and he removed the 
prohibition on the importation of foreign horned cattle, sheep, goats, swine, sal- 
mon, soles, and some other fish, and beef and pork. The general principle of the 
tariff of 1842 was to reduce the duty on raw materials to about 5 per cent., to 
limit the highest duty on partially manufactured materials to 12 per cent., and on 
complete manufactures to about 20 per cent. In 1842, also, the sliding-scale of 
duty on the importation of foreign corn or grain was altered. In 1844, the duty 
on foreign wool was repealed. In 1845, further alterations were made in the 
tariff: the duty on cotton wool, which produced a revenue of about £680,000, 
was repealed (for the benefit of the cotton manufacture), and the cluties on four 
hundred and thirty other articles, which yielded about £320,000 to the revenue, 
were totally abolished. By this important improvement, the expenses of ware- 
housing are saved, and a great number of troublesome accounts and vexatious 
impediments to business are done away with; but for statistical purposes, the 
customs department retains the power of examining articles which do not pay 
duties. 

" The following statements show the net annual produce of the duties of cus- 
toms on all articles imported into the United Kingdom in the two years which 



112 GREAT BRITAIN ALONE PREPARED FOR FREE TRADE : 

Thus it is seen, that, although here is a showing of a large num- 
ber of articles on which protective duties are abolished, both parties 
were ready for it, the manufacturers, because it did them no harm, 
but was rather beneficial ; and the government, because they lost 
nothing, but gained in revenue. It was simply a question of pub- 
preceded the alterations in the tariff made in 1842, and in the two years after 
these chang:es were effected : — 

Articles on which the duties Articles on which no altera 

were reduced in 1842-'3-'4. tion was made in 184-2-'3-'4. 

Two jears Two years Two years Two years 

before. after. before. after. 

Raw materials for manufacture £1,347,.599 £517,243 £847.481 £897,.598 

Articles partially manufactured 1,048,343 648.105 2,886 3,883 

Articles wholly manufactured 159,298.,.. 141.184.,.. 320.272..,. 334,341 

Articles of food (exclusive of corn or grain) . , 1,082.442. , •;'. 1,080.992 16,933,465 17,848,160 

Articles not belonging to the preceding heads. 213.577 90,872 10,421 11,408 

Totals 3,851,259 2.478,396 18,114,525 19,994,890 

"It will be observed that the annual reduction of duties on raw materials for 
manufacture amounted to £830,356, and on articles partially manufactured to 
£400,238; makins: the annual boon to the manufacturers £1,230,594 — equal to 
$5j906,851; while the reduction of duties on manufactured articles imported 
was only £18,114, and on all other articles the reduction was only £124,155. 
At the same lime the amount of revenue on articles in which no alteration was 
made in the tariflf in 1842-'3-'4, was actually increased £1,880,365, while the 
total amount of reductions on articles on which the tariff was altered, was 
£1,372,863. This shows that the increase of the revenue on the unchanged arti- 
cles exceeds the reductions on other articles by the sum of £507,502, or a back- 
ward advance from ' Free Trade' of $2,436,000. 

" By the new British tariff adopted at the present sessions of parliament (1846), 
further reductions and repeal of duties on articles imported have been made ; the 
government still pursuing the policy which has guided them in all the changes in 
the tariff referred to, namely, promoting the interests of the manufacturing classes. 
Thus, raw hides, mahogany, and other woods for manufacture, vegetables, and a 
few other articles, are now added to the free list, while animals, beef, pork, and 
some other articles of food, being also admitted free of duty, the expenses of liv- 
ing are of course reduced to the manufacturer; add to this the reduction of duties 
on bread-stuffs, by the change in the corn-laws, and we can estimate in some de- 
gree the amount of benefits which are expected to be derived by the British man- 
ufacturer by the recent legislation of parliament, and the increased advantages 
those manufacturers will have in contending with foreign rivals for the markets 
of the world. 

" It is true that the new British tariff has reduced the rates of duties levied on 
the manufactures of other nations when imported into the United Kingdom. 
British statesmen know that they may safely rely on the capital and skill acquired 
during long periods of protection, against any attempts that may be made by their 
manufacturing rivals of other countries, to introduce the products of their industry 
into Great Britain. In 1839, the duties received on manufactured articles im- 
ported into the United Kingdom amounted to only £443,355, of which silk goods 
imported contributed more than one half. Two years after the alteration of the 
tariff in l842-'3-'4, the annual amount of duties on manufactures imported was 
£475,525; which shows but a small increase of imports in consequence of the 
reduction of duties. The duties on silk manufactures, in 1839, amounted to 
£247,361, and, in 1844, to £286,535," being about two thirds of all the duties 
collected from manufactured articles from foreign parts." 



UNITED STATES LEAST PREPARED OF ALL NATIONS. 1 13 

lie policy. That Free Trade had nothing to do with it, although 
vaunted as such, is evident from the facts, that this abolition of du- 
ties was discriminating, being confined to a limit which would oper- 
ate for the benefit of all parties concerned, in Great Britain, public 
and private. The differential duties for the colonies and remote 
dependencies of the empire, giving a monopoly of the trade of those 
parts to British manufacturers, were still retained. Not a word is 
said about them. What was granted to other nations, by, this meas- 
ure, was worth nothing to them, and operated for the benefit of the 
grantors ; while a Free Trade with the colonies and dependencies 
of Great Britain, would have been a substantial boon, especially to 
the United States. These diiFerential duties, indeed, were, as we 
believe, enacted expressly to shut out the trade of the United States, 
and to monopolize it for British commerce. 

The privileges secured to British bottoms, by commercial treaties 
and domestic legislation, on condition of touching at a colonial port, 
in returning with cargoes from foreign ports, are another species of 
differential law, of immense consequence to the parties concerned, 
all in favor of British and against foreign bottoms. We began, in 
1817, to try, by countervaiHng legislation, to recover a commerce 
then worth six millions annually, lost by this species of legerdemain, 
and which has been growing more valuable ever since, and we 
have gained nothing of our rights, but rather lost, by the commer- 
cial treaty of 1830. The effect of this treaty has been, that, in fif- 
teen years, from 1830 to 1844, the British commerce with the 
United States gained 300 per cent., while our commerce with 
Great Britain, for the same time, gained only 50 per cent. Great 
Britain raises a revenue, by duties on American tobacco, of some 
eighteen to twenty millions of dollars a year. Look at her exac- 
tions for revenue in other items, given in the note on pages 111 and 
112, in which we and other nations are profoundly interested, and 
see what a mockery is that which she has given up, calling it Free 
Trade — all for her benefit — as compared with that which she re- 
tains, also for her benefit alone. Why talk of Free Trade, with such 
facts, and such unsettled accounts as these, staring the world in the 
face ? It is a perversion of language, and a shame to decency. 

Two remarks will comprehend and show all the Free Trade 
which Great Britain has conceded : First, she has never granted 
Free Trade on any article of her own production, which was a sacri- 
fice to herself; secondly, nor on any article, in the production of 
which she was not prepared to beat all the world. 
8 



114 DEFINITION OP FREEDOM. 



CHAPTER VII. 

FREEDOM CONSISTS IN THE ENJOYMENT OF COMMERCIAL 
RIGHTS, AND IN THE INDEPENDENT CONTROL OF COMMER- 
CIAL VALUES FAIRLY ACQUIRED. 

The Novelty and Importance of this Proposition, a Reason for giving it an early Place in 
this Work. — What is Meant by it. — Definition of Commercial Rights and Values. — 
Liberty not synonymous with Freedom. — Rights as distinguished from Liberty. — Free- 
dom, not an Abstraction, but a Reality. — Is a definable Substance. — The Objects of 
Despotism of every kind, even Spiritual, are Commercial Values. — All Religious Privi- 
leges are Secured and Fortified by Commercial Values. — Freedom requires, that all 
Taxes should be Voluntary, by a Representative Voice. — Otherwise they are an Ex- 
tortion, and not Freedom. — "Voting Supplies." — The British Government more imme- 
diately under the Control of Popular Freedom than that of the United States. — The 
Mexican War an Example. — Many things are called Freedom which are only its Acci- 
dents and Results. — A reasonable Man will be contented with Freedom as here defined. 
— A Man's Commercial Rights includes his Chances in the Future. — The Blood of Mar- 
tyrs shed on Account of Commercial Values. — The Test of the Principle contended for. 

As the proposition at the head of this chapter is a new one, and 
as it defines a fundamental, most important, and most vital element 
of a system of public economy adapted to the United States, per- 
vading the whole, we have thought proper to give it an early place 
in this work, in connexion with the subjects of several chapters 
immediately succeeding this, which naturally grow out of it. The 
novelty of this position may, perhaps, be an apology for a somewhat 
elaborate argument on the point. Having been persuaded, that 
what men call freedom, and profess to value so highly, must be a 
reality of a tangible shape and substance, definable as any other 
reality is, we have studied to find it out, and to give it a definite 
form, and the result is the definition above offered. 

By commercial rights, we mean those claims to property which 
men, by general consent, are allowed to assert — of property, 
which, by the same consent, they may rightfully call their own, 
having in it what the economists usually call exchangeable value ; 
but which we prefer to call commercial value, as we think the 
substitute being less technical, is quicker and better apprehended. 
By commercial values, we mean the things themselves, to which 
these rights appertain. 

Air and water are neither bought nor sold, and are, therefore, 
not ranked among commercial values. They are not produced by 



DEFINITION OF FREEDOM^. 115 

human labor ; and therefore, in a commercial view, cost nothing. 
Instruments which supply us with water, such as wells and aque* 
ducts, or any other facility in bringing this element to our use, and 
adapting it to our purposes by heating it, or by converting it into 
steam, are works of art, and products of labor ; and, therefore, are 
properly ranked among commercial values. But the element 
itself is a product of nature — a bounty of Providence. No man 
sells water, though he may sell the labor which brings it to our 
use. In the same manner air is free to all, though the means of 
enjoying it to our highest satisfaction and greatest benefit, such as 
windows, fans, public squares, and favorable grounds, may cost 
something; and are, therefore, commercial values. In the same 
manner also, all the provisions, offices, and agencies of nature, 
such as the sun, and rain, to produce and fructify; winds, rivers, 
and oceans, to facilitate navigation and transport ; the earth and all 
its wealth, superficial, subterranean, and submarine ; every product 
and arrangement of the Creator, properly called Providence ; all 
these supplies and agencies, ministering to the wants, and gratify- 
ing the desires of man, cost him nothing before they have been ap- 
propriated by regulations of the social compact. They are not, 
therefore, reckoned among commercial values; but are rather a 
basis on which, and instruments by which, the labor of man pro- 
duces such values. When any portions of them are appropriated, 
such as land, water power, mineral regions, etc., it is done under 
the social compact, and the principle of a quid pro quo is recog- 
nised, by right either of discovery, or of possession, or of purchase. 
The law supposes, that all such rights have cost something, that 
the cares, labor, and industry of man have created these values, 
over and above the provisions of nature. 

We prefer the term freedom to that of liberty, not only as being 
the substantive of free, and therefore most proper ; but because 
there is in fact an important difference in the scope and spirit of 
the words. Liberty is often used in the sense of licentiousness; 
freedom never. The former is not unfrequendy employed to de- 
note a state of things, under which a man may do as he pleases, 
without regard to social rights ; whereas, freedom is rarely, if ever, 
used in a sense inconsistent with social rights. Rights are the 
things which we want, and not liberty in the latitudinarian sense 
of the term. It will be found that, as rights are multiplied, liberty 
is abridged. For example, the law directs to take the right on a 
bridge. Therefore a man is not at liberty to take the left. Public 



116 DEFINITION OF FREEDOM. 

convenience requires the establishment of this right, and the abridg- 
ment of this liberty. So of all rights established by common and 
statute law. Not one of them is created without the abridgment 
of liberty. It is to be feared, that the lack of making this distinc- 
tion between Hberty and rights, has produced, and is perpetually 
producing, a great deal of mischief in society, and that many of the 
cries for liberty are no other than claims to do as one pleases, in 
violation of rights ; whereas, the only freedom that is desirable and 
worth contending for, is that state of things which secures rights, 
and suppresses that liberty, or which is the same thing, that licen- 
tiousness, which would violate them. 

Freedom, with most people, is an abstract and vague notion, 
supposed to be valuable, and even worth fighting and dying for. 
But ask people what freedom is, and there is, perhaps, not one in 
a thousand that can tell. It is not an abstraction, but a practical 
good. It is a palpable thing, a tangible blessing. But what is it? 
In what does it consist? Our definition answers, that it consists 
in the enjoyment of commercial rights, and in the independent con- 
trol of commercial values, fairly acquired. 

Oppressors do not rob men of water, or of air, except in extra- 
ordinary cases of a cruel despotism, for punishment or vengeance. 
Such deprivations are wanton acts of inhumanity, of barbarity. 
Such are not the things which oppressors usually want; but they 
want that which costs labor ; they want commercial values. On 
this single and simple principle, as upon a pivot, turns the entire 
system of social wrongs and social rights, comprehending all that 
ever were, or ever can be. It is the principle of meum et tuum, 
mine and thine — a principle recognised from the origin of the 
social state, and which is not peculiar to man, but is constantly 
seen developed among all the animal tribes. Disturb the den of a 
wild beast, or the nest of a bird, and you will see it quickly man- 
ifested. 

It will, perhaps, be thought by some, that our definition of free- 
dom is not sufficiently comprehensive ; especially, that it does not 
reach the case of exemption from spiritual despotism. We sub- 
mit, however, that the object of every system of spiritual despotism, 
as a system, is to get possession and control of commercial values, 
which constitute the arm of physical power. Without these, this 
species of sway would be of no avail, and there would be no motive 
for the attempt to gain and hold it. While the subjects of this 
influence remain in the unimpaired possession of their commercial 



DEFINITION OF FREEDOM. 117 

rights, they are not and can not be subdued ; for they have the 
power in their own hands. All history pertaining to this point — 
and history must decide the question — evinces, that spiritual des 
potisms are always erected for temporal sway as an end.* 

It is sufficiently obvious that temporal power, for the oppression 
of the human race, can only be established and maintained, by 
physical means — means derived from the commercial values of 
society. Despotism can not exist permanently, except at the ex- 
pense of its victims, in a commercial point of view. To make the 
arm of despotism strong, its victims must be made commercially 
weak, by depriving them of such a portion of their commercial 
values, as to create a formidable and irresistible physical power 
over them, and by keeping them in a position of relative impotence 
as to the means of asserting and vindicating their rights. They 
must first be robbed, before they can be oppressed. Let, there- 
fore, the commercial rights of the people be secured and maintained, 
and there is no danger of spiritual or any other despotism, first, 
because there is no adequate motive ; next, because it has nothing 
to feed upon ; and thirdly, because it has nothing wherewithal to 
maintain its power. The strength, the might of the nation, in such 
a case, is with the people. All the abihty of a despotism to hold 
and defend its position, is composed of commercial values wrong- 
fully acquired. Give back the rights, and the power is restored 
with them ; or if the people have not parted with their rights, the 
power could not be easily usurped. It is true, indeed, that the 
government of a country always has the advantage of the people, 
in proportion to the commercial values, or means of power, in the 
hands of each party, because it is one of the duties of a govern- 

* Directly in point, as to the aims of spiritual despotism, above asserted, is the 
following extract from an able article in the Courier Des Etats Unis, New York, 
September 9, 1847, on the spiritual and temporal power of the bishop of Rome : — 

'' Du jour ou le pape s'est trouve revetu de ces deux caracteres, 11 a du con- 
siderer I'un comme un but, I'autre comme un moyen. Or, de la souverainete 
spirituelle ou de la souverainete temporelle, laquelle est le but, laquelle est le 
moyen ? Lorsque nous jetons les yeux sur Phistoire et que nous voyons les papes 
devenir les arbitres de I'Europe, les mediateurs des querelles de prince a prince et 
de prince a peuple, les dispensateurs des trones ; quand nous sondons les celebres 
questions des investitures, des Guelfes et des Gibelins ; quand nous examinons 
I'echec prepare a Wiclef, a Jean Huss, a Jerome de Prague, les luttes engagees 
centre les conquetes de Luther, de Zuingle et de Calvin ; quand nous suivons 
Borgia et Paul Farnese guerroyant pour la destinee princiere des produits males 
de leur celibat fecond, nous sommes forcement conduits a dire que le but papal a 
ete la souverainete temporelle et non point la souverainete spirituelle ; cette der- 
niere reste done a I'etat de moyen." 



118 DEFINITION OF FREEDOM. 

ment to be always prepared for the exigencies of war ; in other 
words, to be armed, and ready for arnniing more effectually, on 
short notice. It must be obvious, therefore, that, in case of a con- 
troversy between the government and people, it is as easy for the 
former to turn its arms against the latter, as against a foreign foe, 
while the people are unprepared for the contest. Hence the security 
of freedom requires, first, that no more of the commercial values 
of a people should be absorbed by the government, than is neces- 
sary for the safety of the commonwealth against foreign machina- 
tions; and next, that popular influence should be sufficiently ele- 
vated and strong, to control executive power. 

But some, perhaps, will say, there is a subtlety in spiritual 
despotism, that is independent of physical power. A system- 
atized spiritual despotism is undoubtedly dangerous to freedom ; 
and all such systems have the end of physical power in view. 
So long as spiritual influence, in its isolated positions, has no 
such aims, and stops short of such an end, it can hardly be seen 
why it should be a subject of any great concern. But when it 
emanates from an estabUshed polity, existing for ages, ever assert- 
ing imperious pretensions, and never failing to avail itself of physical 
power, when it can, it is safer to be vigilant of its operations, than 
indifferent to them. And it will be found, that the principle of the 
doctrine asserted at the head of this chapter, applies to such a case. 
Every religious privilege, in its social character, comprehends a 
commercial right. A man's domicil, and everything pertaining 
thereunto, is a commercial right. No spiritual power can lawfully 
invade that sanctuary. It is sacred to man and to God. In that 
retreat is or should be the tenant's domestic altar ; and, in relation 
to society, it is a commercial right. There he may worship his 
God, without question from any other authority than that of the 
object of his devotions. It is a high and sacred privilege; but, in 
relation to man, it is no less a commercial right. His closet, his 
bible, if he is a Christian, and his aids to devotion, are there. Be- 
tween him and his God, they are sacred privileges ; between him 
and society, they are commercial rights. They have cost him 
care and labor, and they are his. He has the same commercial 
rights in the place of public worship, if, in one way or another, he 
contributes of his earthly substance to its support. 

It must, we think, be seen, that the range of these rights, as con- 
nected with religion, is sufficiently comprehensive, when vindicated, 
to bar tie encroachments of spiritual despotism. Let these rights 



DEFINITION OF FREEDOM. 119 

remain unimpaired, and be fully enjoyed, and it is all the religious 
freedom that any man could desire. And it will be observed, that 
they are commercial rights. Our object is to show, that the bul- 
warks of freedom are composed of rights of this kind, and of this 
kind only. And if this be true of religious freedom, it is much 
more so of civil. Religious and civil freedom are indeed identical, 
in their relations to the state. 

But there is a quantum of every man's commercial values due 
to the state, as a consideration for his benefit in the commonwealth. 
How much ? By what rule of measurement shall it be graduated? 
It will be observed, that w^e are speaking of freedom. It would be 
a solecism to suppose, that any man's commercial values can be 
taken without his consent, and he be free. Force of this kind is 
the essence of despotism. Possibly it may not be felt as such, 
when exerted only to a small extent ; but this does not alter the 
principle. An improper act is not characterized by degrees ; but 
by the principle on which it is based. Extortion in a trifle may 
not be grievous; but multiply and extend it, and it becomes an 
aggravated evil. Even the brute creation know what is their own 
— are conscious of their rights in relation to each other. Much 
less does man need to be told what is his property, or that it can 
not lawfully be taken from him without his consent, without a quid 
pro quo. On this principle is based his right of voice in his con- 
tributions to the state — a right which, of course, can be exercised 
only mediately, or in a representative capacity. It is essential to 
freedom, that government should be the creation, and under the 
control, of those who contribute of their commercial values to sus- 
tain it. In this way, their taxes to the public are graduated by their 
own sovereign will. They pay them as they pay any other de 
mand, for which, as parties to an agreement, they receive a valu- 
able consideration. There is no more force in their taxes, than in 
what they pay for the necessaries and comforts of life. This is 
freedom, and no other state of things can be freedom. 

It should be observed, that this principle is not only comprehen- 
sive, but fundamental and vital to the subject. There is nothing 
that men have ever been dissatisfied with, as the opposite of free- 
dom, in the various forms of slavery or despotism, which is not 
reached by this as a radical cure. We have already seen, that it 
is a remedy for, or a preventive of, spiritual despotism. In the 
same manner, it is so in application to every other species of op- 
pression It occupies precisely the position of what is commonly 



120 DEFINITION OF FREEDOM. 

called "voting supplies" in the popular branch of a legislative Dody, 
only that it goes farther back, is fundamental, and begins at the be- 
ginning. It is well known, that, under a constitutional government, 
as in the United States and Great Britain, the executive arm can 
be crippled at any moment, and in that, way controlled, by the re- 
fusal of supplies on the part of an independent legislative body, and 
that this power is commonly and justly regarded as one of the most 
efficient bulwarks of freedom. The powerful government of Great 
Britain is brought instantly to a stand, when the house of commons, 
the popular branch of the legislature, votes against it, and it can 
not go forward without a change of ministry, alias of the govern- 
ment, in conformity to the intimations of that vote. This power is 
based on the principle now under consideration, that is, the power 
of withholding those commercial values, commonly called supplies, 
which are necessary to the executive, and without which it can do 
nothing constitutionally. In this particular, the British government 
is more subject to the popular will, so far as the franchise extends, 
than that of the United States, and may be forced to reconstitute 
the administration, and change the public policy, at any time, in a 
single day ; whereas, the government of the United States, or its 
administration, can not be changed but once in four years, however 
the people may be dissatisfied with the policy and measures adopt- 
ed. In this particular, therefore, popular freedom has gained more, 
for its prompt and instantaneous influence, under the government 
of Great Britain, than under that of the United States ; but this ad- 
vantage suffers a large abatement in the comparative extent of the 
franchise in these two quarters, it being very limited in the former, 
and nearly or quite universal in the latter. Although freedom can 
not act in the United States, on the most comprehensive scale, but 
once in four years, for any change in public policy that may be de- 
sired ; yet, on account of the extent of the franchise here, when it 
does act, it is capable of exerting a sweeping and powerful influ- 
ence. Nevertheless, it would apparently have been better — cer- 
tainly more favorable to freedom — if, in addition to the extended 
right of suffrage, the government of the United States had been so 
constituted, as not to allow an administration, once installed in 
the place of power, to govern the nation badly, if so disposed, for 
the full term of four years, in spite of the will of the people. Four 
years of power, in such a country, badly used, is enough to inflict 
upon it calamities which would require many years to remedy — 
possibly such as could never be repaired. Take, for example, the 



DEFINITION OF FREEDOM. 121 

Mexican war. Would it not have been well, if there had been a 
power in the people to arrest, or to have prevented it? Consider 
the amount of commercial values, the costs, that have been and 
must be wrested from them, before it will be paid for ! x\s a free 
people, would they ever, with their eyes open, have voted such 
costs, and such public disasters? Kings make war, and the peo- 
ple pay the cost with their blood and treasure. If the people were 
consuhed, there would be few, if any wars, except for defence of 
popular prerogatives. The war of the American revolution, as 
will be found upon examination, was waged solely for the vindica- 
tion of commercial rights — the rights of every man in his own po- 
sition, and in that way the rights of the community. In this great 
fact we have a most impressive verification of the doctrine main- 
tained in this chapter. 

The revolutionary struggle of our forefathers, was not for an im- 
palpable phantom called liberty, which millions have chased, and 
few ever caught to hold except to their own disappointment. The 
wrongs which they complained of, under a tyrannical British sway, 
were a deprivation of commercial rights ; what they contended for 
and ultimately gained, was the restoration and re-establishment of 
those rights. It was a palpable benefit — an instrument where- 
withal to purchase and secure other benefits. It was that without 
which man can not have the desirable things of life. It was sub- 
stantial wealth, of which they had been deprived by unjust legisla- 
tion, and a despotic government. It was the sweat of the people's 
brow that was drawn away by taxes without representation, by ex- 
pensive civil and military establishments maintained at the expense 
of the people to keep them in subjection. In this way they were 
deprived of their commercial rights, and kept poor, without a voice. 
It was to have, to hold, to control, and to enjoy their own, that our 
forefathers went through the revolutionary contest. This is free- 
dom ; and nothing else is freedom. Life, liberty of opinion, of 
speech, and of the press, are the accidents of freedom — the results, 
though often, but erroneously, taken for freedom itself. It is only 
by the usurpation of the commercial values of a people, whereby a 
physical power over them, to hold them in bondage, is maintained, 
that life and its blessings can be put in jeopardy. 

Besides these cursory views which go to the establishment of the 
proposition at the head of this chapter, a close scrutiny of every 
one's own experience will lead to the same result. Give a man the 
use, enjoyment, and control of that which he calls his own — all 



122 DEFINITION OF FREEDOM. 

of which consists in commercial values, or that which such values 
only can secure to him — and he will ask for nothing more. He 
does not want any other freedom on earth, as a reasonable man. 
No man ever complained of oppression or of wrong from govern- 
ment, who had all this ; certainly no insurrection was ever known 
in such a state of things. It would be morally impossible to disturb 
such a state of society, with a view to revolutionize it. This con- 
sideration alone might satisfy every reflecting mind, that this is 
freedom, when it is seen, that man can reasonably desire nothing 
more in the social state. 

And it must be considered, that a man's commercial rights com- 
prehend, not only what he may already have fairly acquired of this 
kind, but all his fair chances of future like acquisitions, by his own 
capital, labor, skill, or talents. Capital, labor, skill, and talent, not 
yet exerted or put to use, are as much commercial values as their 
products already in possession, and are equally in the market for 
sale or employment. It would be but a small part of freedom, for 
a government to allow a man the possession, use, and control of 
that which he has acquired, if it deprives him of that which he is 
capable of acquiring, or of his chances. It is, perhaps, the chan- 
ces of the future which men prize most. Cut these off, bar them, 
and the most tender point of human expectations, of men's claimed 
rights, is assailed. Men, in the vigor of life, who are objects of 
fear to tyrants, and who alone can revolutionize a state, do not lean 
so much on the past, as they press forward to the future. Deprive 
such men of their chances, destroy their hopes, and they will feel 
it more than any other deprivation of w^hich they could be made 
the subjects. Men will even forgive past injuries inflicted by a 
government, will at least forget them, if they can have security for 
their rights in the future. It is for the future chiefly that men love 
freedom, and will contend for it ; and what they love and contend 
for, is commercial values, because, it is by these only that they can 
supply their wants, and gratify their desires. There is no earthly 
good, be it substance or privilege, which is not purchasable by 
these ; and no privilege that is not surrounded and fortified by 
these. It is true, indeed, that religion and the grace of God are 
independent of such aids, and come down a munificence from on 
high, to console the poor and the afflicted — to indemnify even the 
persecuted and the oppressed. But no thanks to man for this. 
This bounty of Heaven does not at all affect the claims of every 
man for his commercial values, as between him and his fellows 



DEFINITION OF FREEDOM. 12S 

and which, though also bounties of Heaven, constitute a basis of 
social rights between man and man, as spiritual benefits descending 
directly from Heaven can not, on account of their impalpable nature 
as subjects of human regulation and control. These latter benefits 
are above the jurisdiction of society, and independent of it, except 
so far as the means of obtaining and enjoying them are concerned, 
which, as before shown, are also properly ranked among commer- 
cial rights. 

It is for this reason that men will fight and die for their religion, 
that is, for the means of religion, which are necessarily of a com- 
mercial character. They do not fight and die for the grace of God, 
in the highest sense of the term ; for man can not deprive them of 
that, and none have ever enjoyed it, in so large and rich a measure, 
as Christian martyrs. It was for social rights, alias for freedom, 
which always involves commercial rights, that the blood of martyrs 
has flowed so profusely. Persecuting and murderous tyrants have 
never been able to take anything from their victims, who have suf- 
fered for the faith of Christ, but their commercial values, of which 
life itself was one. At the same time that the martyrs were stripped 
of every earthly good, and were sacrificed at the stake, or on the 
rack, or in the flames, or by the ferocity of wild beasts, or by any 
other instruments of cruelty, not less various than the prolific inge- 
nuity of fiendly malice could supply, they were infinitely more than 
indemnified by the presence and the grace of God, and the crown 
that awaited their emancipation. They suffered for what? For 
the cause, for social rights, for freedom, for commercial values, not 
only on their own account, but on that of their brethren, of the 
church, of society. As the patriot dies for his country, so the 
Christian martyr gives himself up for the Christian commonwealth, 
both of which sacrifices are made for the future good of the socie- 
ties for whicfi they shed their blood. If it be said, that the Chris- 
tian martyr dies for his faith, because he will not renounce his Lord 
and Master, it is true. But this condition is imposed merely as a 
pretext for a_ deprivation of commercial rights. It was not for the 
mere love of cruelty and death, that Christian martyrs have been 
sacrificed ; but it was for commercial benefits which their execu- 
tioners hoped to obtain, directly or indirectly. Commercial values 
have always been at the foundation, and constituted the cause, of 
such murderous despotism. What immense confiscations of prop- 
erty, and how many other commercial advantages, have been gained 
by t'Tants, in the persecution of Christians ! It may be that this 



124 DEFINITION OF FREEDOM. 

end has not always been obtained ; but that such were the aimi?, 
there can be no more doubt, than of the fact. Other motives may 
have been, were of course, assigned. There is nothing more hypo- 
critical and false than injustice. The strength of despotism always 
lies in commercial values ; and the object of tyrants is to fortify 
their power by an accumulation of such means. They do not prac- 
tise injustice and oppression wantonly, though they may show mal- 
ice, and display the most diabolical passions, in the execution of 
vengeance on those who stand in their path, or who refuse to yield 
to their claims. All the vices inherent in the nature of man, or of 
which he is susceptible by temptation, and all the worst passions 
that ever urged him on to crime, have not unlikely, have doubdess, 
mixed themselves up with these atrocities. There is a natural 
affinity between vice, and crime, and murder, in all the forms ox 
each. They are all parts of the same character, constituting only 
different stages of progress in one career. But it is only by the 
acquisition and perverted use of commercial values, that depraved 
passions are gratified. These are the means of their sustenance, 
the elements on which they feed. The atrocities and inhumanities 
that were practised on Christians, in the early ages, under the pre- 
text of purging society of bad members, would never have stained 
the pages of history, but for the commercial advantages that were 
expected from them, and too often realized. Even under the mis- 
takes that were made, in this particular, as proved by the apologists 
of Christians to the Roman emperors, the very argument shows that 
the object of those persecutions was commercial benefit. 

In the same manner, when the church herself became corrupt^ 
and turned persecutor, her inquisition, her dungeons, her racks, hex 
mito-de-fes — all her instruments for the punishment of heresy, in- 
volving the use of physical power — were for the defence and fox 
the acquisition of commercial values, and by means of them. This 
was the power employed, and it was employed to strengthen and 
fortify itself, by depriving its victims of the possession and enjoy- 
ment of these rights. Like all false pretexts, the defence and propa- 
gation of the true faith was the alleged motive ; the real aim was 
that power which is founded on commercial values. "Life, liberty, 
and the pursuit of happiness," in one's own chosen way, are them- 
selves commercial values and commercial rights. The church, as 
a persecutor, was not content with taking these, but the goods of 
heretics, before acquired, were first forfeited. 

Despotism, in whatever form, when analyzed, will be found to 



DEFINITION OF FREEDOM. 125 

aim at these objects, and only at these, as a power to maintain its 
authority and sway, inasmuch as nothing eJse will answer its pur- 
poses. As a consequence, it will follow, that freedom consists in 
keeping all commercial values in the hands and under the control of 
those to whom they rightfully belong. 

The truth of a principle, and the perfection of a definition, 
are alike demonstrated by their application to all conditions and 
phases of the subject. Herein is proved the truth of the prin- 
ciple which lies at the foundation of the argument of this chapter. 
It is not denied, that there are various attributes of freedom, 
passing under denominations, which do not directly suggest this 
principle, and which may even apparently lead to the conclusion, 
that freedom consists in something else ; but it will be found 
that this something else, in all its parts and ramifications, is redu- 
cible to this basis, and rests upon it. A people never did, and 
never would complain of despotism, and a political revolution can 
not be found in all history, except for an unjust deprivation of com- 
mercial rights. There are, indeed, numerous other forms, in which, 
as results, despotism is made manifest ; and these are not unnatu- 
rally taken as the fundamental evils, whereas they are only conse- 
quences. The first abatements of an absolute despotism, such as 
may be found in history, and which has extended to power over life, 
without responsibility, have been the lopping off of its branches ; 
and the reformation has gradually continued, till, in niodern times, 
both in Europe and America — especially, as we think, in the lat- 
ter — an approximation has been made to the root of the difficulty, 
to the very foundation. Scarcely in any part of the civilized world, 
are men now familiar with the cutting off of heads, at the arbitrary 
nod of a despot. Constitutional governments, and laws enacted by 
them, prevail extensively, and are constantly gaining ground. In 
the United States, in Great Britain, in France, and in other parts 
of Europe, the cause of freedom has made such progress, that the 
care of men is not for their heads, but for their purses, for their 
commercial values ; and what now remains, in some of these coun- 
tries, is a proper adjustment of a system of taxation, and a security 
of the chances of commercial acquisitions. This is the great ques- 
tion of the age, and demonstrates, that it is the last, as well as the 
fundamental question, in the progress of freedom. The inequali- 
ties in the burdens of society, as they bear on commercial rights, 
are yet vast, and vastly complicated ; and they are too often vastly 
greater than they ought to be — than is consistent with freedom. 



126 WHAT CAUSED THE AMERICAN REVOLUTION. 



CHAPTER VIII. 

WHAT CAUSED THE AMERICAN REVOLUTION. HISTORY OF THE 

PROTECTIVE POLICY IN THE UNITED STATES. 

A Restatement of the Object of this Work, and of the great Error of the Economists. — The 
Theme of this Chapter important as a Starting Point in the General Argument. — The 
Instinctive Policy of a Parent State toward Remote Dependencies, fatal to the End in 
View. — Such was the Policy of Great Britain toward her North American Colonies. — A 
Review of that Policy. — The Doctrines of Joshua Gee. — Their Influence on Parliament 
and the Board of Trade. — Acts of Oppression and Wrong Provoked the Revolution. — 
Declaration of Independence. — Commercial Values, as the Fruits of Labor, the Occasion 
of the Contest. — The Position of the Free-Trade Economists as to the Elements of this 
Controversy. — They were forced to justify Wrong. — The Wrong a Commercial one. — 
The Aim of the Revolution was to break down the Old, and to establish a New System 
of Public Economy, that is, a Protective System. — The Struggle was based on the Prin- 
ciple of Mine and Thine, as it determines Commercial Rights. — A Protective System of 
Society the great Object in this Country from the First. — The great Movement from 
Europe to America was and is for thi.s. — The Confederation a Rope of Sand. — A Pro- 
tective System the great Object of the Federal Constitution. — One of the first Acts of 
the new Congress was to establish a Protective System. — Documentary Evidence for 
Fifty Years, that Protection was the Uniform Policy of the Country. — The Cause of 
Apostacy from this Ancient Faith. 

We wish it to be observed, throughout this work, that we are 
writing on public economy for the United States, and not for the 
family of nations, nor for any other nation. We have, in the fore- 
going pages, particularly in the second chapter, distinctly and em- 
phatically repudiated the idea, that it is possible to adapt a system 
of public economy to all nations, or even to any two, and we have 
endeavored to show, that the errors of Free-Trade economists have 
necessarily been fatal, by attempting to form a general system. 
By over-grasping ambition, or some other kindred propensity, in 
putting their screws on all the world, they have broken their ma- 
chinery, and done injury to the subject; in essaying to do too 
much, they have spoiled the whole. Had they been content to 
study and lay down rules for their respective commonwealths, they 
would have found enough to do, and might have done it well ; but, 
in reaching out their arms, to take in all the world, they seem to 
us to have fallen into the sea, for lack of ability for so great an 
enterprise ; or rather, to have failed, because it was impossible in 
the nature of the subject, and in the nature of things, to execute 
such a plan. Though there are common principles, there can not 
be a common system, in its great, essential, and most important 



WHAT CAUSED THE AMERICAN REVOLUTION. 127 

parts ; and the parts which can not be made common, are those 
which are most vital to each of the great parties concerned. 

A more minute review of the occasion of the American revolu- 
tion, and of the aims of American independence, which are neces- 
sarily and frequently alluded to, in the progress of this work, and 
which have been somewhat dwelt upon already, is fundamental 
to the great inquiry in which we are engaged, and will cast more 
light on the general subject, than any other things in history, to 
which we could direct our attention, as starting points. 

It is hardly necessary to say, that the occasion of the American 
revolution, was a denial and deprivation of rights, and the impo- 
sition and infliction of wrongs. It seems to be a natural, if not a 
necessary policy of a home government, to increase the dependence 
of remote and colonial branches of itself, in proportion to the in- 
crease of their importance, and of their ability to gain independence; 
and in that way ultimately to precipitate the event apprehended. 
It was soon discovered by British statesmen, that their American 
colonies had all the elements of gigantic power, and that to be re- 
tained, they must be ruled with a discipline corresponding with the 
danger of losing them. Accordingly, this policy is found to date 
back to the earliest history of the colonies, and consisted chiefly in 
the plan to confine the colonists to agriculture — to the production 
of raw materials — to prohibit them from engaging in commerce, 
and to force them to purchase of the mother-country such articles 
of manufacture and of the mechanic arts as they might want. 
Joshua Gee seems to have been one of the oracles most relied upon 
for political doctrines, in the treatment of the American colonies, 
of which the following extracts from him are specimens : " That 
manufactures in American colonies should be discouraged or pro- 
hibited." — " We ought always to keep a watchful eye over our 
colonies, to restrain them from setting up any of the manufactures 
that are carried on in Great Britain ; and any such attempts should 
be crushed in the beginning. For if they are suffered to grow up 
to maturity, it will be difficult to suppress them. Our colonies are 
much in the same stale Ireland was in, when they began the woollen 
manufactory ; and as their numbers increase, will fall upon man- 
ufactures for clothing themselves, if due care be not taken." — "If 
we examine into the circumstances of the inhabitants of our plan- 
tations, and our own, it will appear, that not one fourth part of their 
own products redounds to their own profit; for out of all thai 
comes here, they only carry back clothing, and other accommoda- 



128 WHAT CAUSED THE AMERICAN REVOLUTION. 

tions for their families, all of which is of the merchandise and man- 
ufacture of this kingdom." — "New England, and the northern 
colonies have not commodities and products enough to send us in 
return for purchasing their necessary clothing, but are under very 
great difficulties ; and therefore any ordinary sort sells with them. 
And when they have grown out of fashion with us, they are new- 
fashioned enough there." 

This corresponds with the following facts collected from Pitkin's 
Statistical View : In 1699, the British parliament prohibited the 
colonies from exporting wool, yarn, or woollen fabrics, and from 
carrying them coastwise from one colony or place to another. In 
1719, parliament declared, that the erection of manufactories in the 
colonies, tended to lessen their dependence on the mother-country. 
This declaration, and subsequent legislation on the subject, were 
in consequence of memorials from British merchants and man- 
ufacturers, who complained that the colonies were carrying on 
trade, and erecting manufactories. The subject continued to be 
agitated, and, in 1731, the board of trade were instructed to inquire 
as to the colonial laws made to encourage manufactures ; as to 
manufactures set up ; and as to the trade carried on in the colonies ; 
and to report thereon. Accordingly, in 1732, the board reported, 
that Massachusetts had passed a law to encourage manufactures ; 
that the people of New York, Connecticut, Rhode Island, and 
Maryland, had fallen into the manufacture of woollen and linen for 
the use of their own families ; and of flax and hemp in coarse bags 
and halters — all which, they said, interfered with the rights and 
profits of British manufacturers and merchants. The board of trade, 
therefore, recommended, that the minds of the people of those 
colonies should be immediately diverted, and a stop be put to these 
practices, or they would be extended. The same year parliament 
prohibited the exportation of hats from the colonies, and tra- 
ding in them from one colony to another, by ships, carts, or horses. 
No hatter was allowed to set up business, who had not served seven 
years; nor to have more than two apprentices; and no black person 
was allowed to work at the trade. Iron mills for shtting and roll- 
ing, and plating-forges, were prohibited, under a penalty of five 
hundred pounds. This system of prohibition and restriction con- 
tinued to increase, against both manufactures and commerce, and 
in proportion as the people manifested a disposition to supply their 
own wants, new and more vexatious modes were invented, and ap- 
plied with increased rigor, and under heavier penalties, to prevent 



WHAT CAUSED THE AMERICAN REVOLUTION. 129 

them, till finally, as the colonies waxed great and strong, and serious 
apprehensions began to be felt that they would outgrow the ability 
of the niother-country to keep them in subjection, the right of tax- 
ation to furnish the means of maintaining this power over them, was 
asserted, without allowing the correlative right of representation. 
Hence the rising of the people, and the declaration of independence 
which was followed, after a seven years' war, with its acknowledg- 
ment. During the debates in parliament, on the rights of the 
colonies. Lord Chatham said, " he would not have the Americans 
make a hob-nail." Another noble lord added, *' nor a razor to 
shave their beards." 

By these and similar facts, with which the history of that period 
abounds, it is easy to see what was the occasion of the American 
revolution. It will, perhaps, be more fully illustrated by the fol 
lowing extracts from the Declaration of Independence: — 

" He [the king] has refused his assent to laws the most whole- 
some and necessary for the public good" [particularly laws for the 
encouragement of home manufactures, etc.] ; . . " he has refused 
to pass other laws, unless the people would relinquish the right of 
representation ; he has dissolved representative houses, repeatedly, 
for opposing, with manly firmness, his invasions on the rights of 
the people ;" . . " he has endeavored to prevent the population 
of these states ;" . . "he has made judges dependent on his 
will ;" . . "he has erected a multitude of new offices, and sent 
hither swarms of officers, to harass our people, and eat out their 
substance ; he has kept among us, in times of peace, standing 
armies, without the consent of our legislatures ; he has affected to 
render the military independent of, and superior to, the civil 
power ;" . . " he has cut off our trade with all parts of the world ; 
he has imposed taxes on us, without our consent ;" etc. . . " In 
every stage of these oppressions, we have petitioned for redress, 
in the most humble terms. Our repeated petitions have been 
answered only by repeated injury ;" etc. 

As all rights, in a system of civil polity, established on a polit- 
cal platform, which are of importance to claim, are of a com- 
mercial nature, positively or constructively, directly or indirectly, 
as shown in the preceding chapter ; that is, the right to be our own, 
to have our own, and to use our own, without abatement, restraint, 
or control, except by laws equally important to all the members of 
the commonwealth, in which all have a voice ; it will follow, from a 
consideration of the subjects of grievance, as above briefly and com- 
9 



130 WHAT CAUSED THE AMERICAN REVOLUTION. 

prehensively represented, which led to the independence of these 
United States, that they were all of a commercial character, and 
had respect to the rights of property which every man has in him- 
self, and to the avails of his own exertions in a state of freedom, 
bating only his fair tax to the public, in which, also, he is entitled 
to a voice. It is not pretended that there are no other rights ; but 
that all others follow. The security of all commercial rights, 
is a security of all others, which men, in their relations to each 
other, on the platform of a free commonwealth, are likely to claim. 

It should not be forgotten, then, as it is an important point, that 
the rights which the American fathers asserted in opposition to 
tyranny, and which they vindicated with their fortunes and their 
blood, were of a commercial nature. As elements of a civil polity, 
they are also political rights. And this, too, is an important con- 
sideration. Labor was the vital ingredient; and the shield thrown 
over it by the success of the revolution, rescued it from its former 
exposed condition. It was a political instrument, a structure, an 
edifice, that rose out of that struggle, to secure, what strife and 
blood had vindicated, viz., the rights of labor, which thus became 
— or rather were thus demonstrated to be — political rights; and 
which were thus reinstated in their true position. The aim of the 
British crown was to draw to itself the fruits of American labor ; it 
wanted nothing else. The aim of the American fathers was to 
retain those fruits in their own possession, as their own right ; and 
this was the occasion of the struggle. 

It is manifest enough, now that these rights are seen to be of a 
commercial nature, that they fall within the range of public econ- 
omy. And they are not only of a commercial nature, as well as 
social and political, but it will be seen, that they are radical sources 
and fundamental causes of commercial prosperity. These rights 
have been entirely overlooked by European economists, and others 
on this side of the Atlantic, who have been servile and weak enough 
to borrow their opinions, and to adopt systems made to their hands. 
In overlooking this element, it was impossible to build up a system 
of public economy, that would not be erroneous. This element, 
in such a system, would necessarily be wanting as an anchor to the 
ship, while at rest; and it would be wanting also, when most 
needed, as a compass, and as a fixed celestial sign, while on a 
voyage over the trackless deep of inquiry on the subject. All 
human society, as shown in another chapter, is built up by labor, 
and moored to its hand. The better, therefore, the condition, and 



WHAT CAUSED THE AMERICAN REVOLUTION. 131 

the more healthful the cause, so much better and more vigorous 
the product. 

But, from a sickly parent, a promising offspring has been 
pledged ; from a degraded and servile operator, the finest speci- 
mens of human ingenuity and art, are alleged to come ; and from 
an oppressed and manacled agent, it is proposed to erect the most 
worthy monuments of human greatness ! Such as these are the 
fundamental elements of the systems of the leading Free-Trade 
economists. They have rejected the sound, and adopted and 
cherished the rotten. 

As the rights of labor ever have been, so will they ever remain, 
in accordance with the beneficent orders of the Creator, the truest 
sources, and the most exact exponents of public and private wealth. 
There may doubtless be unnatural accumulations of wealth, by the 
suppression of these rights ; but it can not be so great in the aggre- 
gate ; and the misfortune of beginning wrong, is always to end 
wrong, as well as to be in peril on the way. Everything built on 
the sacrifice of these rights, topples on its foundation, and will fall 
at last. There is no true economy in such a policy, either at the 
beginning, or at any stage thereof, or at the end ; nor can any 
human ingenuity make an argument on that side, that will bear 
scrutiny. It is, perhaps, because of this radical, fundamental de- 
fect, that we find so many contradictions and absurdities in the Eu- 
ropean economists — we mean those of the Free-Trade school. 
Each of them, especially Adam Smith, has abstract propositions 
enough to build up any system ; plenty for an American system, 
and all right ; but when he comes to put the parts of his system 
together, the faults of the whole are apparent. It was necessary in 
their case, having a vicious state of society for a foundation, to 
justify the greatest wrongs done to man, and to show how profit 
to the race, to nations, could come out of such treatment. 

American independence established an American system of 
public economy. If it did not, independence must necessarily 
have been a total failure. The declaration was based on the prin- 
ciple, "To THE Rescue." Rescue from what? From injus- 
tice, oppression, tyranny. And in what did the injustice, the op- 
pression, the tyranny, complained of, consist ? The British crown, 
as shown above, undertook to draw all the fruits or profit of Amer- 
ican lator to itself, in the same manner as European governments, 
for the most part, still absorb the profits of European labor. The 
wrong was not only political, social, and moral, but commercial ; 



152 WHAT CAUSED THE AMERICAN REVOLUTION. 

and it was all three of the former only as and because it was espe- 
cially the latter. All the substance of the wrong was of a com- 
mercial nature. It receives these other denominations or epithets, 
merely to describe its character in a social point of view. They 
are no description of the substance. The point and essence of the 
wrong consisted in the fact, that one party took away the property 
of other parties, which was the right of the latter, because they had 
created it by their own exertions, and because it was necessary to 
their comfort and happiness. And it was a wrong, which not only 
made the suffering parties poor, but which took away their chances 
of growing rich — even of bettering their condition. It was a sys- 
tem of economy well enough calculated to promote the wealth and 
augment the power of Great Britain at home ; but it was the ruin 
of the American colonies. At best, it was a vast injury to them, 
and an insuperable obstacle to their greatest possible prosperity. 
The'object of the rievolution was to change the system — to change 
it entirely, fundamentally — to secure to the people the benefits of 
the right of property in themselves. When a man is forced to 
work for the benefit of others, it is a mockery to say he is his own 
man. Such was the condition of the colonists before the revolution. 
They were forced to work for the benefit of foreigners. As Joshua 
Gee says, in the extract above made, " if we examine into the cir- 
cumstances of the inhabitants of our plantations, and our own, it 
will appear, that not one fourth part of their own products redounds 
to their own profit;" and the professed object of his plan, which 
was adopted and acted upon, by the British government, was to 
perpetuate this system. The American fathers went into the 
struggle against the British crown, to break it up. They went for 
a rescue, and to establish an order of things that should secure to 
them their own commercial rights, and retain among themselves the 
fruits of their own industry and enterprise. They went for a sys- 
tem to encourage home manufactures, which had been forbidden; 
to leave every man free to follow his own chosen pursuit, make 
hats or anything else, and to secure to him the enjoyment of his 
own earnings — of that cumulative wealth which always results 
from systematic industry, when not absorbed by oppressors. The 
change which they sought for and effected, was a revolution in 
public economy, and these two words comprehend thai whole. 
The nominal change from the relations of a colony, to the position 
of an independent state, was of no consequence without this ; and 
if the British crown had granted this, or never taken it away, the 



WHAT CAUSED THE AMERICAN REVOLUTION. 133 

American fathers would never have desired a separation. There 
would have been no motive — no object. It was purely and 
exclusively to establish a new and American system of public 
economy. 

Most people are accustomed to think, that all rights passing 
under the denomination of political, are certain abstractions sup- 
posed to be of importance, though perhaps undefinable. They 
may be tried by following out the inquiry carefully — in what does 
their importance consist? Take for example, the rights claimed 
of the British crown by the American fathers, and the correlative 
wrongs. It will be found that every one of them was of a com- 
mercial character, and exclusively so. When scrutinized, they 
resolve themselves into meum-et-tuum, mine-and-thine questions, 
involving valuable commercial considerations. Nor can it be al- 
leged, that they are, on that account, more sordid, or less worthy 
of respect, than has commonly been supposed. For after all, the 
principle of ?nine and thine is the nicest and the most important 
rule of society ; it is the ground of all controversy ; the end of all 
debate ; the cause of all wars ; and the authority that establishes 
peace and quietness. It may excite to action the purest and most 
ennobling virtues ; or it may rouse the fiercest and most destruc- 
tive passions. Armies and navies may rush to combat by its 
instigations ; thrones may be shaken and nations revolutionized 
by its power. It is not, therefore, of course and in itself, a 
mean consideration, though in the controversy between the Amer- 
ican fathers and the British crown, it was purely a commercial 
one. It was important to have this point distinctly setded and 
properly elucidated, that every one may see clearly, and feel 
forcibly, that an American system of public economy must ne- 
cessarily grow out of it. 

The history of the protective policy in the United States, will be 
found, as we think, to comprise the essence of all that is peculiar 
and distinctive in the political history of this country, from its foun- 
dation to the present time, running back through our colonial his- 
tory — not, indeed, as a thing that was through all this period, but 
as an object for ever aimed at and contended for, as vital to all the 
great and minor interests of the country and of the people. It may 
be said to have been the grand object of the pouring forth of Euro- 
pean emigrants on these western shores, since Columbus announced 
their existence to the world. It was a sense of oppression, of 
grievances, of a deprivation of rights, which produced tha* inqui- 



134 HISTORY OF THE PROTECTIVE POLICY 

etude in Europe, creating a wide-spread willingness and desire to 
sacrifice native-born comforts and innumerable precious ties, for "a 
lodge in some vast wilderness," remote though it were, but beaming 
with the charms of distance as the abode of freedom. Though 
political designs, commercial enterprise, and speculation, had their 
share of influence in the settlement of this continent, it is unneces- 
sary to say, that the ruling passion of European emigration this 
way, for ages, was an indomitable aspiration after freedom — a free- 
dom which could not be enjoyed in the old world ; and it is equally 
true, as all know, that the same feelings still continue to prompt 
this great ' movement from East to West. Westward the star of 
empire moves ; but it is all for freedom. It is to purchase, to se- 
cure, and to protect the rights of man — the very rights which have 
been under consideration in the preceding chapter. It is to be re- 
lieved from that incubus of European despotism, which robs man 
of the reward of his exertions, and to enjoy that reward. 

But unfortunately for freedom, that same w^atchful power, the 
cruelties of which had forced this great movement, guided and 
prompted by the instincts of its own voracious and insatiable appe- 
tite for oppression and wrong, followed its victims in the pathway 
of their escape, and spread, and continued to hold, over them, the 
claims of its unjust pretensions. It is enough for our purpose here, 
to abridge this great chapter of American history, and point only 
to that of the North American colonies, till it ended in the estab- 
lishment of American independence. The whole of that history was 
a struggle for freedom, without gaining it; for it will be found, that 
the commercial troubles of the confederated states, till the adoption 
of the constitution in 17S9, were greater than they had ever been, 
and that the independence acquired was merely nominal — all and 
solely for want of a protective system, which, under such a rope 
of sand as the articles of confederation, could not be put in force. 
The evils of this specific character — there were no other — were 
seen, felt, and deplored ; the states, in their isolated positions, tried 
to protect themselves, and only made the matter worse, aggravated 
the difficulties, by interferences ; till at last, the states being on the 
verge of dissolution, as an independent nation, on account of this 
great defect, the federal constitution was adopted as a remedy. 
The history of those times shows, that the grand object, the impel- 
ling necessity, of the formation of the federal government, in 1789, 
was to obtain a power for the protection of t-he commercial rights 
of the nation and of the people ; and in accordance with this de- 



IN THE UNITED STATES. 135 

sign, the earliest action of the new government, was on the question 
of forming and establishing a protective system. The bill, or act, 
which was the great object of the federal constitution, on motion 
of Mr. Madison, the father of that instrument, was brought for- 
ward, with the least possible delay, under the following preamble : 
" Whereas, it is necessary for the support of government, for the 
discharge of the debts of the United States, and for the encourage- 
ment and PROTECTION of manufactures, that duties be laid on goods, 
wares, and merchandise, 2wpo?te^ — Be it enacted," &c. ; and after 
having been passed, was signed by President Washington, the 
Fourth of July, 1789 — a signal coincidence, as being the birth- 
day of American freedom, not an accident, manifestly, but ex- 
pressly designed, no doubt, as a profound and emphatic historical 
expression of the president's and of the public sense of the affinity 
and identical purpose of these two great events, and that the first 
could not be complete, nor consummated, without the second. 
The same necessity which begat the revolution, was the parent of 
the federal constitution, and of this law — this law, or its policy, 
established and secured, being the end of all. 

A few extracts from presidential messages and other documents, 
from Washington's administration down to the time when this policy 
was doomed to encounter an unnatural and suicidal opposition, will 
exhibit the prominency which this great principle has held in the 
counsels and legislation of the government, during the progress of 
our history.* 

* From Washington's Messages to Congress. 
" The advancement of aijriculture, commerce, and manufactures, by all proper 
means, will not, I trust, need recommendation; but I can not forbear intimating to 
you the expediency of giving effeclual encouragement, as well to the introduction 
of new and useful inventions from abroad, as to the exertions of skill and genius 
in producing them at home." 

" Congress has repeatedly, and not without success, directed their attention to 
the encouragement of manufactures. The object is of too much consequence not 
to msure a continuance of their efforts in every way which shall appear eligible." 

From Jefferson's Messages. 
"To cultivate peace, and maintain commerce and navigation, in all their lawful 
enterprises; to foster our fisheries, as nurseries of navigation and for the nurture 
of man, and to protect the manufactures adapted to our circumstances — these, fel- 
low-citizens, are the landmarks by which we are to guide ourselves in all our pro- 
ceedings." — Second jinnual Message. 

"The situation into which we have been forced, has impelled us to apply a por- 
tion of our industry and capital to national manufactures and improvements. The 
extent of conversion is daily increasing, and little doubt remains, that the estab- 
lishnfitnts formed and forming will, under the auspices of cheaper materials and 



136 HISTORY OF THE PROTECTIVE POLICY 

These extracts, in the note below, from state-papers and other 
documents, might be greatly extended, if it were necessary, to show, 

subsistence, the freedom of labor from taxation with us, and of protecting duties 
and prohibitions, become permanent." — Eighth Annual Message. 

From Jefferson's Letter to Benjamin Austin, 1816. 
« We have experienced what we did not then believe, that there exist both 
rotiigacy and power enough to exclude us from the field of interchanges with 
other nations ; that to be independent for the comforts of life, we must fabricate 
them ourselves. We must now place our manufacturers by the side of the agricul- 
turist. The former question is now suppressed, or rather assumes a new form. 
The grand inquiry now is, shall we make our own comforts, or go without them at 
the will of a foreign nation. He, therefore, who is now against domestic manufac- 
tures, must be for reducing us either to a dependence upon that nation, or he clothed 
in skins, and live like beasts in dens and caverns. I am proud to say, that I am not 
one of these. Experience has taught m,e, that manufactures are now as necessary to 
our independence as to our comfort." 

From Madison's Messages. 

" The revision of our commercial laws, proper to adapt them to the arrangement 
which has taken place with Great Britain, will doubtless engage the early atten- 
tion of Congress. It will be worthy at the same time of their just and provident 
care, to make such further alterations in the laws as will more especially protect and 
foster the several branches of manufacture which have been recently instituted or 
extended by the laudable exertion of our citizens." — 1809. 

" I recommend also, as a more effectual safeguard, and as an encouragement to 
our growing manufactures, that the additional duties on imports which are to ex- 
pire at the end of one year after a peace with Great Britain, be prolonged to the 
end of two years after that event. '^ — 1814. 

"But there is no subject which can enter with greater force and merit into the 
deliberations of Congress, than a consideration of the means to preserve and pro- 
mote the manufactures which have sprung into existence, and attained unparalleled 
maturity throughout the United States during the period of the European wars. 
This source of national independence and Avealth I anxiously recommend to th« 
prompt and constant guardianship of Congress." — 1815. 

" In adjusting the duties on imports to the object of revenue, the influence of the 
tariff on manufactures will necessarily present itself for consideration. However 
wise the theory may be, which leaves to the sagacity and interest of individuals 
the application of their industry and resources, there are in this, as in other cases, 
exceptions to the general rule. Besides the consideration which the theory itself 
implies of a reciprocal adoption by other nations, experience teaches that so many 
circumstances must occur in introducing and maturing/manufacturing establish- 
ments, especially of a more complicated kind, that a country may remain long with- 
out them, although sufficiently advanced, and in some respects peculiarly fitted for 
carrying them on with success. Under circumstances giving a powerful impulse 
to manufacturing industry, it has made among us a progress, and exhibited an effi- 
ciency, which justify the belief that, with a protection not more than is due to the 
enterprising citizens whose interests are now at stake, it will become, at an early 
day, not only safe against occasional competition from abroad, but a source of do- 
mestic wealth and external commerce. In selecting the branches more especially 
entitled to public patronage, a preference is obviously claimed by such as will re- 
lease the United States from a dependence on foreign supplies, ever subject to 
casual failures, for articles necessary for the public defence, or connected with the 



IN THE UNITED STATES. 137 

that the protective policy had always been a special and prominent 
object of the government, from the adoption of the. constitution down 

primary wants of individuals. It will be an additional recommendation of particu- 
lar manufactures, where the materials for them are extensively drawn from our 
agriculture, and consequently impart and insure to that great fund of national 
prosperity and independence, an encouragement which can not fail to be reward- 
ed." — Seventh Annual Message. 

From Monroe'' s Messages. 

" Our manufactures will likewise require the systematic and fostering care ol 
the government. Possessing, as we do, all the raw materials, the fruit of our own 
soil, and industry, we ought not to depend, in the degree we have done, on sup- 
plies from other countries. While we are thus dependent, the sudden event of war, 
unsought and unexpected, can not fail to plunge us into the most serious difficul- 
ties. It is important, too, that the capital which nourishes our manufactures 
should be domestic, as its influence in that case, instead of exhausting, as it must 
do in foreign hands, would be felt advantageously on agriculture, and every other 
branch of industry. Equally important is it to provide at home a market for our 
raw materials; as, by extending the competition, it will enhance the price, and 
protect the cultivator against the casualties incident to foreign markets." — Inau- 
gural Address. 

" Uniformity in the demand and price of an article, is highly desirable to the 
domestic manufacturer. It is deemed of great importance to give encouragement 
to our domestic manufactures." — Third Annual Message. 

"It can not be doubted, that the more complete our internal resources, and the 
less dependent we are on foreign powers for every national as well as domestic 
purpose, the greater and more stable will be the public felicity. By the increase 
of domestic manufactures, will the demand for the rude materials at home be in- 
creased ; and thus will the dependence of the several parts of the Union on each 
other, and the strength of the Union itself, be proportion ably augmented." — Fifth 
Annual Message. 

" Satisfied am I, whatever may be the abstract doctrine in favor of unrestricted 
commerce, provided all nations would concur in it, and it was not liable to be in- 
terrupted by war, which has never occurred, and can not be expected, that there are 
other strong reasons applicable to our situation and relations with other countries, 
which impose on us the obligation to cherish and sustain our manufactures. Sat- 
isfied I am, however, likewise, that the interest of every part of our Union, even 
those benefited by manufactures, require that this subject should be touched with 
the greatest caution, and a critical knowledge of the effects to be produced by the 
slightest changes." — Sixth Annual Message. 

From J. Q. Adams's Messages. 

"The great interests of an agricultural, commercial, and manufacturing nation, 
are so linked in union together, that no permanent cause of prosperity to one of 
them can operate without extending its influence to the other. All these are alike 
under the protecting power of legislative authority, and the duties of the representa- 
tive bodies are to conciliate them in harmony together. 

" Is the self-protecting energy of this nation so helpless, that there exists in the 
political institutions of our country no power to counteract the bias of foreign legis- 
lation ; that the growers of grain must submit to the exclusion from the foreign 
markets of their produce; that the shippers must dismantle their ships, the trade 
of the north stagnate at the wharves, and the manufacturers starve at their looms, 
while the whole people shall pay tribute to foreign industry to be clad in forj»ign 



138 HISTORY OF THE PROTECTIVE POLICY 

to 1830, being a period of fifty years. That it was also sustained 
by popular opinion, in a quarter where it has since been repudi- 

garbs; that the Congress of the Union are impotent to restore the balance in 
favor of native industry destroyed by the statutes of any realm?"— i^ottr/^ Annual 
Message. 

Extract of a Letter from Andrew Jackson, 1824, lo Dr. L. H. Coleman, N. C. 

"Heaven smiled upon and gave us liberty and independence. That same Provi- 
dence has blessed us with the means of national independence. . . He has filled 
our mountains and plains with minerals — with lead, iron, and copper — and given 
us a climate and soil for the growing of hemp and wool. These being the great 
materials of our national defence, they ought to have extended to thenl adequate 
and fair protection, that our manufacturers and laborers may be placed in a fair 
competition with those of Europe. . . I will ask, what is the real situation of the 
agriculturist ? Where has the American farmer a market for his surplus produce ? 
Except for cotton, he has neither a foreign, nor a home market. Does not this 
clearly prove, when there is no market at home or abroad, that there is too much 
labor employed in agriculture, and that the channels for labor should be multi- 
plied? Common sense at once points out the remedy: Draw from agriculture 
this superabundant labor; employ it in mechanism and manufactures, thereby 
creating a home market for your breadstuffs — distributing labor to the most prof- 
itable account; and benefits to the country will result. Take from agriculture, 
in the United States, 600,000 men, women, and children, and you will at once give 
a market for more breadstuffs than all Europe now furnishes us with. In short, 
sir, we have been too long subject to the policy of British merchants. It is time 
we should become a little more Americanized, and instead of feeding paupers and 
laborers of England, feed our own; or else, in a short time, by continuing our 
present policy, we shall be paupers ourselves. . . The experience of the late war 
ought to teach us a lesson, and one never to be forgotten. If our liberty, and re- 
publican form of government, procured lor us by our Revolutionary fathers, are 
worth the blood and treasure by which they were obtained, it is surely our duty to 
protect and defend them. . . It is, therefore, my opinion, that a careful and judi- 
cious tariff is much wanted, to pay our national debt, and afford us the means of 
that defence within ourselves on which the safety of our country and liberty de- 
pends ; and last, though not least, give a proper distribution to our labor, which 
must prove beneficial to the happiness, independence, and wealth of the com- 
munity." 

From Jackson's Second Annual Message. 

" The power to impose duties upon imports originally belonged to the several 
states. The right to adjust these duties, with a view to the encouragement of do- 
mestic branches of industrj-^, is so completely identical with that power, that it is 
difficult to suppose the existence of the one without the other. The states have 
delegated their whole authority over imports to the general government, without 
limitation or restriction, saving the very inconsiderable reservation relating to the 
inspection laws. This authority having thus entirely passed from the states, the 
right to exercise it for the purpose of protection does not exist in them; and, con- 
sequently, if it be not possessed by the general government, it must be extinct. 
Our political system would thus present the anomaly of a people stripped of the 
right to foster their own industry, and to counteract the most selfish and destruc- 
tive policy which might be adopted by foreign nations. Thi«! surely can not be 
the case : this indispensable power, thus surrendered by the states, must be within 
the scope of authority on the subject expressly delegated to Congress. In this 



IN THE UNITED STATES. 139 

Hted, the remarkable conclusion of the ^^ Address of the Society of 
Tammany, or Columbian Order, to its absent Members, and the 
Members of its several Branches throughout the United States, 
New YorJc, 1819," found in the note below,* will sufficiently 
evince. 

The address itself is one of great interest, force, and eloquence. 
The cause of Protection was never advocated more earnestly, or 
with more lucid and effective arguments. It is also to be observed, 
that the letter to Dr. Coleman, cited in the other note, written by 
the great chief of the " Tammany Society" party, and dated five 
years after this address, is sufficiently clear and decided in its ad- 
vocacy of a protective system, as also the extract from his message 
to congress, in 1830. 

There are no facts of history better certified, than, that the 
necessity of a protective system for the states, was the main subject 
of deliberation at the first convention of delegates at Annapolis, in 
1786, assembled to consider the question of a constitution ; and 
at the second, in 1787, when the constitution was framed ; and 
that, to obtain the power to establish such a system, was a leading 
purpose of that instrument. General Washington, the president, 

conclusion I am confirmed, as well by the opinions of Presidents Washington, Jef- 
ferson, Madison, and Monroe, who have each repeatedly recommended this right 
under the constitution, as by the uniform practice of Congress, the continued acqui- 
escence of the states, and the general understanding of the people." — 1830. 

• "We recommend to you, brethren, to be examples of moderation and firmness 
to your fellow-citizens, and to hold fast of those stern Revolutionary principles 
which gavCy and which alone can preserve your independence. 

" Clarkson Crolius, Grand Sachem, 

"James S. Martin, Secretary. 

" Countersigned by John Woodward, Clarkson Crolius, Joseph P. Simpson, James 
S. Martin, Benjamin Romaine, Matthew L. Davis, William Mooney, Committee 
of Correspondence. New York, October 4, 1819. 

" Resolutions of the Society of Tammany^ or Columbian Order, passed October 

11, 1819. 

"Resolved, That as friends to our country, we recommend to our brethren of 
the diflferent societies of Tammany, or Columbian Order, the necessity as well as 
moral duty, to our country, ourselves, and posterity, of refraining from every spe- 
cies of useless extravagance in our mode of living; especially in furniture, dress, 
the table, ostentatious equipage, and expensive amusements. 

"Resolved, That we will discountenance the importation and use in our families 
of every species of foreign manufacture or production, which can or may be reasona- 
hly substituted by the fabrics or productions of the United States. 

" Resolved, That as ' economy is wealth,' we seriously recommend to our breth- 
ren throughout the United States a strict and rigid observance of this great moral 
duty in their families and social intercourse." 



140 HISTORY OF THE PROTECTIVE POLICY 

appeared In a domestic suit before the first congress, under the 
new constitution; their second act, as stated above, was a law 
" for the encouragement and protection of domestic manufactures ;" 
and fifteen members of that body, with James Madison at their 
head, were also members of the convention that framed the con- 
stitution, who could not be ignorant of its great purpose, when they 
assisted in passing this law. The continued action of the gov- 
ernment, therefore, upon this subject, for fifty years, as shown 
without any apparent diversity of opinion — certainly with great 
unanimity — was a natural consequence of such a beginning, stim- 
ulated by such powerful causes, derived from the experience of 
the people. 

But the personal strifes of aspirants for the presidency, who 
have been more concerned for their own success than for the public 
weal, have, within twenty years, introduced a new era in the polit- 
ical character and tendencies of the country, and put in peril the 
grand purpose of the American revolution and of American inde- 
pendence. We have witnessed the strange spectacle of public 
men, occupying the position of leaders, wheeling to the right and 
to the left, and right about face, and turning somersets, on the most 
grave and momentous questions of public policy, drawing their 
devoted followers in their train, without any reason to be accounted 
for, except that of personaL ambition ; because such a total change 
of opinion, so suddenly transpiring, on questions the aspects of 
which have not changed, may be set down as a moral impossibility 
with sagacious and far-seeing minds, except in cases where " the 
wish is father to the thought." Public and ambitious men, seeing 
that they could not accomplish their ends in one way and by one 
set of means, would seem to have come to the conclusion to try 
another way and another set of means, without regard to the good 
of the country. 

The government and institutions of the United States, as we 
have seen, started into being on the basis of the protective policy 
— were begotten by it. This policy was the native genius of the 
people ; it was the natural growth of their position, of their struggles, 
and of their original and subsequent relations. It was a necessity 
imposed upon them by Providence, from which they could not 
escape with impunity. It was the natural suggestion of their 
instincts, as impressed upon them by their history and experience. 
They were forced into it, and they never could get out of it, ex- 
cept by violence and sacrifice. Everything in nature, everything 



IN THE UNITED STATES. 141 

in morals, and everything in human prudence and foresight, pointed 
that way. For this, they were forced into the revolution ; for this, 
they were forced out of the confederation ; to secure this, they 
adopted the federal constitution ; for this, they continued to legis- 
late on that platform for fifty years ; and behold, in ten years, from 
1830 to 1840, this mighty fabric, which had cost rivers of blood, 
and mountains of wealth, after having occupied more than two 
centuries in building — for it dates back to the first settlements of 
the country — was all leveled with the ground ! It was rebuilt in 
1842, and in 1846 is again overthrown ! Such is the history of 
the protective policy in the United States. 



142 THE DESTINY OF AMERICAN FREEDOM 

/ 



CHAPTER IX. 

THE DESTINY OF AMERICAN FREEDOM NOT YET ACHIEVED. 

The general Desire for Freedom, before and after the Discovery and Settlement of Amer- 
ica. — American Independence an Epoch of Freedom. — "An American System" means 
much. — It is a " Commercial System." — " Political" the Shadow, " Commercial" the 
Substance. — The Responsibility of a Nation that has Freedom in Trust for Posterity and 
for Mankind. — Faith as a Power in Man for the Attainment of Freedom. — The Advo- 
cates of Freedom are in general practically Right, though often theoretically Wrong. — 
Freedom yet in its Cradle. — The vacillating Policy of the Country in regard to the 
Means of Freedom. — Seventy Years of the Era of American Freedom gone, and yet 
Freedom was to be Defined. — The People have much to Learn on this Subject. — What 
Great Britain and Europe Desire. — The Jeopardy of American Freedom. — Free Trade 
would throw it away — would Sell It. 

Having shown, in Chapter VIL, that freedom consists in the 
enjoyment of commercial rights, and in the independent control of 
commercial values fairly acquired, we propose, in this chapter, to 
call to mind the historical facts, that society in Europe, had been 
tending for centuries toward freedom, before an outlet of its un- 
satisfied population was opened in the discovery of the New 
World ; that hopes and designs of political emancipation, for the 
most part, lay at the foundation of the movements of immigrants to 
this quarter; and that the American colonies, especially in the 
north, were founded in this spirit. And we refer to these facts for 
the purpose of showing, that freedom is progressive, and is never 
gained fully at a single leap. 

The royal charters, so far as the influence of those who obtained 
them could effect it, were studiously framed for the security of 
rights held dear by the colonists ; and the political history of the 
early settlements is one of perpetual struggle between royal pre- 
rogatives and popular claims. The cause of freedom continued to 
advance, in the minds and hearts of the people of this new world. 
Events were constantly ripening in North America for an epoch, 
which ultimately found its date in the establishment of American 
independence. It was literally, and in the most emphatic sense of 
the term, an epoch of freedom. It was not an accident of the 
day ; but it was the event of centuries of preparation. All its seeds 
were transplanted from Europe. Society there had long been 
laboring for this birth. There was no safety, in that quarter, for 
the cradle of freedom, in such an enlarged sense ; nor could its 



NOT YET ACHIEVED. 143 

swaddling clothes be prepared here, till ages had rolled away. 
Nevertheless, they were being made all the while by careful hands, 
from the time when Jamestown, Plymouth, and New Amsterdam, 
obtained a place in history, till the first blood of the American 
revolution stained this virgin field. From that hour is dated a new 
epoch in the history of freedom. From that hour commenced a new 
modification of society, under a new system. System is the 
word which denotes this new state of things — the American 
system. Will any American deny, that there is, and that there 
ought to be an American System? System of what? Of 
what principles? What is its foundation, its parts, its structure? 
Wherein is it peculiar ? Does it differ from European systems ? 
And if so, in what? It is called freedom — was, in fact, a great 
advance in freedom. In what, then, does this freedom, this system, 
consist? The answer to this question is found in the argument 
of Chapter VII. — in commercial rights. It comes, then, to 
this, that the whole of the American system, so far as it is a 
peculiar one. Is a commercial system, for the establishment and 
defence of commercial rights. It is commonly called iiolitical. 
But political is the shadow; commercial, the substance. The 
former characterizes the thing socially ; the latter denotes the thing 
itself. Hence the name most commonly employed to denote the 
subject In Its social aspects — '•^ jjolitical economy;" but we have 
preferred that of 'public economy, for reasons specified in the first 
chapter. The system is political, as being expedient, best, in its 
relations, or designed to be so ; but its positive character is entirely 
a commercial one. 

An American system supposes relations to something foreign ; 
and it hardly need be said, that these relations, for the most part, 
have respect to a state or to states of things, in those quarters 
whence these new and independent legislators came ; that is, from 
the European world. And as a new and peculiar system, it also 
supposes a new and peculiar state of society — commercial society, 
be it observed, not meaning, however, anything other thereby than 
political ; for it is both, and in both Identical. But having ex- 
plained the sense in which we use the term, commercial, in this 
connexion. It is expedient to adhere to it, in the present train of 
reasoning, that we lose not sight of the fundamental doctrine estab- 
lished in Chapter VII., to wit, that freedom consists in the enjoy- 
ment of commercial rights. It is the substance, and not the 
shadow, which we wish to follow up. 



144 THE DESTINY OF AMERICAN FREEDOM 

It is the interest of labor alone that claims to be considered in the 
formation of an American commercial system. Labor, in every 
part of the world, is the primary and fundamental power of states ; 
and the question, in pubhc economy, is, whether its benefits shall 
accrue to the laborer himself, in the shape of compensation, or to 
other parties that absorb it to themselves by oppression and wrong, 
in allowing labor only a bare subsistence. The latter alternative 
is the European system ; the former is intended to be the Amer- 
ican ; and whether it shall be maintained, depends entirely on the 
maintenance of the difference in the price of labor, by an American 
commercial system, in relation to foreign parts. It is exclusively 
a commercial question, determined by a commercial principle, 
which governs the whole commercial world, and is defined with all 
the accuracy of figures. It is simply, whether the power of one, in 
trade, is equal to the power of three ; in other words, whether 
American labor, which costs three, can stand, in the same market, 
against European labor, which costs one; for that is about the 
average difference. 

It is not pretended, as stated elsewhere, that it is necessary for 
an American system to afford an average protection to American 
labor, equal to this difference, because it is understood and known, 
that the very design of the European system, in depriving labor of 
its fair reward, is to appropriate the wages kept back to aggrandize 
the usurpers, and that the ainis of such usurpation would be dis- 
appointed, if the wide margin of this difference were all absorbed 
in a commercial competition. A very small fraction of it will 
ordinarily answer the purpose of such a strife ; and the smallest 
possible fraction by which one producer can undersell another, will 
always secure the market. It is the fact of this difference, and 
the immense power which it gives to European labor over Amer- 
ican, which claims the consideration of American statesmen, that 
their eyes should ever be open to the points on which this power may 
be brought to bear, and to the amount of it that may be employed 
in any given direction. For American statesmen to forget, to 
deny, or not to see, that this adverse power exists, and that, in the 
hands of those who wield it, it is ever on the alert to embrace its 
opportunities to assail the vulnerable points of the American sys- 
tem, is one and the same thing as to withdraw the shield of Amer- 
ican freedom, and leave it entirely at the mercy of those from 
whom it was purchased with so much blood and treasure, and by 
ages of strife and agony. The vulnerability will be found at every 



NOT YET ACHIEVED. 145 

point where foreign cheap labor comes into competition, in our 
own market, with American labor, whether it be labor already in 
action, or labor ready to go into action, under adequate encourage- 
ment. The right of chances, as remarked in another place, is as 
sacred as the right of possession. 

It is entirely false to say, as Free Trade avers, that an American 
system controls labor, and forces it into unnatural channels, oper- 
ating unequally and unjustly on different departments, encouraging 
one kind, and discouraging another. Such is neither the design, 
nor practical operation of the system. It is based on the principle 
of encouragement, not of control; of protection, not of injustice; 
of invitation to, not of prohibition of, home labor. It is to call out 
the dormant energies of the people, by opening the door to new 
enterprises, which can not, by any possibility, operate to the dis- 
advantage of any other ; but, on the contrary, must necessarily 
benefit all others, by diminishing the number engaged in each, and 
affording them a better chance, at the same time that it increases 
the demand for their products, by raising up new customers. We 
do not mean, that the multiplication of pursuits, under such a sys- 
tem, as a matter of course, diminishes the number engaged in each, 
positively, but relatively. It prevents them from being over- 
crow^ded, to make them unprofitable, and makes each more prof- 
itable, as elsewhere shown. 

The great error, therefore, in this branch of the general argument, 
as committed by the Free-Trade economists, is one of principle. 
They assume, that a commercial system, enacted for the protection 
of home industry, controls labor, and thereby operates to the disad- 
vantage of other branches not comprehended in any specific acts 
of protection ; whereas, the practical operation of such a system, 
in the United States, is a mere invitation to labor and capital, that 
lie dormant, or which are not so profitably employed as they might 
be under these new encouragements. It neither controls the labor 
or capital so invited into a new field, nor any other branches of 
them. It injures no other, but benefits all. There may, indeed,, 
be a negative injustice done to some branches of industry, by a 
partial distribution of protection, which ought to be avoided; but it 
is impossible there should be any positive injustice in any quarter ; 
it is impossible, indeed, that there should not be a universal benefit, 
by every new pursuit that is called into being, under such a sys- 
tem, unless it can be shown, that some parties are positively taxed 
by protection extended to others. But it is abundantly proved, 
10 



146 THE DESTINY OF AMERICAN FREEDOM 

elsewhere in this work, that such is not the fact in the operation of 
an American system of Protection ; but, on the contrary, with no 
exception that is permanently injurious to any party whatever, that 
the protected articles which we wish to be cheapened, such as those 
of manufacture, are cheapened by protection ; and that those, the 
prices of which we wish to sustain, and if possible, to raise, such 
as those of agriculture, and such as labor itself, are sustained and 
raised by the same means. 

Freedom, in the social state, is a thing of great price, because it 
is of great cost. Centuries foiled away, in that great strife, which 
terminated in the birth of American freedom. Empires were 
shaken and revolutionized, and thrones tottered and fell, in the 
long agony. And what was this for ? That the rightful owners 
of all commercial values might hold their own, and control it. 
Analyze the things which men hold dear on earth, sift them to their 
foundation, enter the magazines of all terrestrial good, and the wheat 
will be found to consist in commercial values. 

There is a great responsibility resting on the nation that has 
attained to the greatest degree of freedom, and secured to every 
citizen the undisturbed possession and independent control of his 
own — a responsibility, not only as a spectacle, an example for 
mankind, but as involving a trust for posterity. To throw it away, 
is not simply a folly, but it is a crime against the human race. 
The people of the United States occupy precisely this position. 
Their forefathers gained for them a priceless boon, in one great 
struggle, and by hazards and costs not to be estimated, handed 
it down as a charge to keep and bequeath to endless generations, 
or till human society should be dissolved by the fiat of Heaven, 
and till all its members shall come to judgment. And what is that 
boon ? Simply, as before shown, that every man may enjoy his 
own commercial rights, without disturbance, and without liability 
to depredation ; and these rights are not less, but more, in the 
chances of the future, than in the present. 

Faith, as an attribute of man, for a better state on earth and 
hereafter, considered as a general sendment, is providential. Men 
can not always tell why or how it comes ; but they have it ; and 
this faith is itself the parent of the thing which they desire. It is 
evident enough, that there was a strong faith in general society, 
that the discovery of America would open a new era in the history 
of the world. What specific forms these expected events would 
assume, was of course a secret to those who confided in their 



NOT YET ACHIEVED. 147 

future development. Nevertheless, such a faith existed, and had a 
potent influence on the minds of men — especially of those who 
embarked in the various enterprises of settling the new continent. 
This undefined expectation at last took shape and a palpable form 
in the achievement of American independence, which we have 
marked as an Epoch, in the highest and most enlarged sense of 
the term — a point in the progress of society, to be followed by 
new scenes, in a new drama, of an indefinite and inconceivable 
extent, as to the future, but all deriving a character from this grand 
event. We call it an Epoch in the progress of freedom. 

It will be observed, that we have devoted a chapter expressly to 
illustrate and establish the proposition, that freedom consists in the 
enjoyment and independent control of commercial values by and 
among those who create them, or who, by the usages of society, 
rightfully come into their possession as heirs. We mean chiefly 
those who create them ; but the rights of heritage can not be 
denied, and in all ages, and in all states of society, have been held 
sacred. We are not aware, that there can be any objection to such 
a state of society, where all rights of primogeniture and of entail 
are nullified by fundamental law. By the creators of commercial 
values, it will of course be understood, that we mean all those, 
who fairly acquire property, or a valuable position, in any way, 
directly or indirectly, by their labor, industry, or skill, in any pur- 
suit of life. Our object in this definition of freedom, has been to 
erect a wall between the rightful owners of commercial values, and 
the usurpers of them ; and the design of our argument on this 
point has been to show, that freedom is not an abstraction, but the 
enjoyment of a valid commercial consideration. As much as free- 
dom is supposed to be worth, there is scarcely any subject on 
which its advocates have more indistinct, vague, and indefinite 
notions, as one of speculation. Practically they are pretty sure to 
be right ; theoretically not so much so. 

What we have proposed to show in this chapter, in connexion 
with the numerous propositions allied to this, which we have en- 
deavored to establist^ in other parts of this work — and which, 
therefore, we here assume as established — is, that the destimj of 
American freedom is not yet achieved. We might, indeed, say, 
with much appearance of reason, that it is scarcely begun to be 
achieved. As before remarked, it took centuries to establish the 
epoch. The era commencing with that date will extend, as we 
trust, into a long and indefinite future. It may, perhaps, be as- 



148 THE DESTINY OF AMERICAN FREEDOM 

sumed, that it has scarcely begun to develop itself. That three 
score and ten years of this era should have passed away, the peo- 
ple in the meantime boasting of freedom, and yet, that we should 
have occasion to attempt to define what freedom consists in, at this 
day, is a curious fact ; and that that definition should be entirely 
new, is a very instructive fact, if it be also true. That the people 
of this country, under their new organization of society, with every 
possible chance to establish freedom on a permanent and immova- 
ble basis, should have made such mistake? as are proved in other 
parts of this work, in regard to the protection of their own commer- 
cial rights, which, in the present day, comprehend all rights of any 
consequence ; that they should have gone on for seventy years, 
blundering, so to speak, in blind and dark ways, often overwhelmed 
with public and private misfortune, without having been able to 
determine on any system of public economy, as a permanent one, 
but for ever vacillating from one extreme to another ; that Free 
Trade should be the dominant principle of one time, and that of 
Protection soon after, alternating as regularly as the pendulum of 
a clock ; that opinion on this great question, on which so much de- 
pends, should still be divided, and doubtful with many what will 
be the end of it all ; if, indeed, freedom be involved in this ques- 
tion, as we sincerely and profoundly believe it is, such a history 
goes far to prove, that the foundation on which it rests, and the 
pivot on which it turns, are yet but poorly apprehended. 

Nevertheless, this slow progress of freedom — we assume to call 
it so, from what we have proved — is not so discouraging as might 
at first sight be supposed. It does not show, that the people of 
this country do not understand what freedom is practically ; but only, 
that they have yet much to learn as to the theory of best securing 
its ends. It proves, too, that freedom, like all good things, on earth 
and in heaven, is a costly blessing, hard of attainment. The Amer- 
ican fathers, who wasted their treasures and shed their blood for it, 
were, without doubt, in the right path. So were the founders and 
framers of our government and its institutions. So, generally, has 
been the march of our history ; and so, above all things, are the 
instincts of the people. Let the people once understand, that free- 
dom is not a vague abstraction, floating high above their heads, but 
a palpable thing, like cash in hand ; that it consists in the enjoy- 
ment of their own commercial rights, and in the independent con- 
trol of their own commercial values, such as they have fairly earned 
by their own hard toil, or by their skill and enterprise, or such as 



NOT YET ACHIEVED. J 49 

they have received from their fathers, or their fathers' fathers, who 
obtained them in the same honest way ; let them understand, that 
the original controversy with the British crown, on this very soil, was 
about these very things, and nothing else ; that the occasion of that 
controversy was the degradation of labor in Europe, and the at- 
tempt to keep it down here ; that it was the robbery of labor of its 
fair reward, of its rights ; and that the Free-Trade system operates 
precisely in the same manner, and to the same effect, on the com- 
mercial rights of the American people, to rob them of their com- 
mercial values, as did that system of oppression and wrong against 
which the American fathers rebelled ; and it will not take long, 
after that, for the American people to understand what freedom is. 

We have shown, elsewhere, that the claim of Free Trade, among 
us, to buy cheaper of foreigners than we can buy at home, and to 
sell to them on better terms, amounts to nothing ; that, indeed, the 
argument on this point is reversed ; that a protective system is more 
economical, to all parties, in all these respects ; and that, under it, 
we can go forth into the market of the world, and rival those very 
foreigners, who, it is averred, would sell to us cheaper. How could 
they sell to us cheaper, if we could rival them in the foreign mar- 
ket? The absurdity is manifest, and the argument conclusive. 

Turn which way we will, in the consideration of this subject, its 
aspects strike us everywhere the same. The establishment of 
American independence was, beyond all question, an epoch of 
freedom ; that freedom consisted in the enjoyment of commercial 
rights, and in the independent control of commercial values by and 
among those to whom they belonged ; the very fact that these rights 
were redeemed, proves, that, having been once usurped by wrong, 
and subsequently rescued, they may be again usurped, and that 
they require protection ; and yet Free Trade has the audacity to 
propose, that this protection should be withdrawn. The question, 
therefore, between Protection and Free Trade, in the United States, 
is for ever and necessarily a question of freedom — a freedom ac- 
quired by force of arms, at great expense of blood and treasure, 
requiring to be defended by a public policy ; a freedom which 
Free Trade offers for sale ! Or, if it can not sell it, to throw it to 
the winds of heaven, as if it cost nothing, and were worth nothing! 

If American freedom does not consist in these things, then it is 
nothing ; then the strifes of the American revolution, and the cost 
of American independence, were without excuse, and a waste; 
then there was no good reason for that contest, and the result is a 



150 DESTINY OF AMERICAN FREEDOM NOT YET ACHIEVED. 

failure. Who will say this? Doubtless something was acquired ; 
and doubtless there remains something to defend, besides an empty- 
name. What is it? Where is it? In what does it consist? Whose 
property is it ? If we have not already answered these questions, 
we know not how it is to be done. If it is not in every man's own 
position, as it is precious to himself; as it enables him to live more 
to his satisfaction, than he could otherwise do ; as it gives him a 
house and home, food and raiment, education for himself and chil- 
dren, comfort, happiness — all without fear of deprivation ; in a 
word, if it does not consist in the use, enjoyment, and independent 
control of those commercial values, which he can call his own, and 
which he knows are his own, because he created them, or received 
them from his father, then, we confess, we do not know where to 
find the thing called freedom. 

It can not be denied, that this controversy has opened up to us 
at last some very grave features. On the one hand, we behold the 
suffering and the virtuous of mankind, for centuries, carefully watch- 
ing the ripening of the fruit of the tree of liberty, gathering it as it 
falls into their lap, and garnering it up for use, till a concentrated 
family of its devotees have proclaimed their rights, and sworn to 
defend them. They have sown their seed, and awaited their time 
in patience. But, on the other hand, while these newly-planted 
fields were ripening to the harvest, the sickle in the hands of the 
reapers, and every prospect full of hope, a cry is raised, that this 
harvest is common property, and the whole world rush in, each 
one to snatch what he can in the melee. This is Free Trade. 



THE DIFFERENT STATES OF SOCIETY. 151 



CHAPTER X. 

THE DIFFERENT STATES OF SOCIETY IN EUROPE AND AMERICA 
REQUIRE DIFFERENT SYSTEMS OF PUBLIC ECONOMY. 

The three fundamental Elementa of European Economists. — Adam Smith's and Ricardo's 
Statement of them. — These Elements do not exist in the United States as a Rule, but 
(mW as Exceptions. — The Ancient System of European Society gives Character to 
the Modern. — The economical Position of the Laborer there, the same as that of the Ox 
or the Slave. — This Position assigned to Labor by European Economists, as proved by 
their own Statements. — The Theory of Maltlias justifies this Position. — This Doctrine 
pervades the European, and has been transferred into American Systems of Economy. 
— The prevalent Principle of Land Tenures in Europe fundamentally different from 
that which prevails in the United States. — " Rent" the lord of all in Europe. — The Prin- 
ciple of Serfdom and Villanage, under other names, still prevails in that quarter of the 
World. — Labor doomed there. — American Society fundamentally different. — The same 
System of Public Economy can not apply to each. — Reform in America, slow, but sure. 
— Can only be effected by Public Economy. — Free-Trade Economy hostile to Popular 
Rights. 

Having disclosed, in Chapter II., the contingent basis on 
which a system of public economy must rest, and the contingent 
ground on which alone its propositions can be established, to wit, 
the application of experience to a given state of things, it may be 
useful, in this stage of the inquiry, to exhibit some of the points 
of difference in the states of European and American society, to 
both of which, it is preposterously claimed by the advocates of 
Free Trade, that a common system of economy is equally applicable. 

The British economists of the Free-Trade school, have agreed 
on the fundamental elements of public economy, which, they aver, 
comprehend the entire basis of the superstructure, on which, and 
on the ramifications growing out of them, are based all the propo- 
sitions of their system. The importance of the position of these 
fundamental elements in their system, arises from the fact that all 
their reasonings are, directly or indirectly, founded upon them. 
We propose to show that two of these three distinct supports of 
their system, are wanting in American society, and consequently, 
that any superstructure built upon them, for application in the Uni- 
ted States, must fall to the ground. Set up a house on three abut- 
ments, and take away two, what will be the result ? It is down, 
a heap of ruins. It will be sufficient to cite Adam Smith's and 
Ricardo's description and adiustment of these three fundamental 



152 THE DIFFERENT STATES OF SOCIETY 

elements, to indicate what they are. Smith says: "The whole 
annual produce of the land and labor of every country naturally 
divides itself into three parts — the rent of land, the wages of labor, 
and the profits of stock ; and constitutes a revenue to three diiferent 
sorts of people — to those who live by rent, to those who live by 
wages, and to those who live by profit. These are the three great, 
original, and constituent orders of every civilized society, from 
whose revenue that of every other order is ultimately derived." 

Ricardo represents them thus : " The produce of the earth, all 
that is derived from its surface by the united application of labor, 
machinery, and capital, is divided among three classes of the com- 
munity, viz., the proprietor of the land, the owner of the stock or 
capital necessary for its cultivation, and the laborers by whose 
industry it is cultivated. . . The proportions of the whole produce 
of the earth which will be allotted to each of these classes, under 
the names of rent, profit, and wages, will be essentially different. 
. . To determine the laws which regulate this distribution, is the 
principal problem in political economy." 

It will be observed, first, that these views are limited — not pro- 
found — taking their own programme as a rule. "The principal 
problem in public economy," is here announced, as growing out 
of agriculture, as if the arts in all their branches, as if commerce 
and trade, as if the fisheries, &c., had nothing to do with it; or as 
if the subject had nothing to do with them. The leading topics 
of Ricardo's work, as enumerated in his table of contents, will 
show that he surveyed but a limited field ; and it will also be seen 
that most of these topics grew out of a state of society which, if not 
entirely unknown in the United States, exists only in small frag- 
ments, coming down from what is here regarded as a vicious state 
of society, and which is alike repugnant to the genius of the 
American people and of American institutions. Take for example 
the topics of "Rent;" "Taxes on Rent;" "Tithes;" "Land 
Tax ;" " Taxes on Gold ;" " Taxes on Houses ;" " Taxes on 
Wages and Profits ;" " Poor Rates ;" " Taxes on Producers ;" 
&c. These, making more than a third of the chapters of this work, 
are great practical subjects in Europe. They enter into all the 
forms of society there, and pervade its entire structure. But not 
so in the United States. They are, for the most part, contrary to 
the genius of the American people, and too obnoxious to be intro- 
duced among them to any considerable extent. The ambition of 
every American citizen is to be an independent proprietor of ?i free- 



IN EUROPE AND AMERICA. 153 

hold estate, or to acquire an Independence of some kind that is tan- 
tamount ; and the American people have the greatest repugnance 
to direct taxation. Perhaps not more than a moiety of the subjects 
of legislation in Europe, are subjects of legislation in the United 
States, and the other moiety present themselves in forms so diverse 
in each quarter, that it is not possible to treat them in the same way 
for both hemispheres. How, then, is it possible that a system of 
public economy which is adapted to the former sphere, and which 
grows out of it, should be adapted to the latter, when the very de- 
sign of such a system is to give advice on the subjects of legisla- 
tion, and to suggest forms ? 

But it will be found, on an examination of these three capital 
elements, " rent, profit, and wages," as presented in the above 
extracts, when their meaning is considered, that the British Free- 
Trade economists occupy a field entirely different from that of the 
United States, and that not one of these three comprehensive ele- 
ments can be found among us, to any considerable extent, in the 
forms in which they stood up before them, as an actual state of so- 
ciety for them to treat of, and write for. They divide society into 
" three classes, the proprietor of the land, the owner of the stock 
or capital necessary to its cultivation, and the laborers by whose 
industry it is cultivated ;" and in correspondence with this classifi- 
cation, they appropriate to the first class " rent," to the second 
" profit," and to the third " wages." Ricardo's programme con- 
eludes by saying : " To determine the laws which regulate this 
distribution, is the principal problem in political economy.' 

This, no doubt, is a fair description of the fundamental elements 
of their theory, as regards both the premises and the conclusion. 
Such was and is still the state of society there. The exceptions 
they did not deem worthy of consideration, and must take care of 
themselves, or be left to the discretion of legislators. Now, it hap- 
pens, that the things which constitute the rule in that state of so- 
ciety, are the exception in the United States ; and, vice versa, the 
things which constitute the rule in the United States, or which 
ought to do so, are the exception in Great Britain and in Europe. 
For the most part, American citizens are independent proprietors of 
the soil, or of some equivalent ; they all aim at this ; and there is 
not a man among them who will submit to the abject and depend- 
ent condition of the third class of European economists. Ameri-. 
can society does not exist in such forms. 

Mr. Mill, the logician, before cited, remarks very pertinently ow 



154 THE DIFFERENT STATES OF SOCIETY 

this point : ** It has been greatly the custom of English political 
economists to discuss the natural laws of the distribution of the 
produce of industry, on a supposition which is scarcely realized 
anywhere out of England and Scotland, viz., that the produce is 
shared among three classes, altogether distinct from one another, 
laborers, capitahsts, and landlords ; and that all these are free agents, 
permitted in law and in fact to set upon their labor, their capital, 
and their land, whatever price they are able to get for it. The con- 
clusions of the science, being all adapted to a state of society thus 
constituted, require to be revised when they are applied to any other. 
They are inapplicable where the only capitalists are the landlords, 
and the laborers are their property, as in slave countries. They 
are inapplicable where the universal landlord is the state, as in 
India. They are inapphcable where the agricultural laborer is 
generally the owner both of the land itself and of the capital, as 
in France [also in the United States], or of the capital only, as in 
Ireland. It may be objected to the existing race of economists, 
that they attempt to construct a permanent fabric out of transitory 
materials ; that they take for granted the immutability of arrange- 
ments of society, many of which are in their nature fluctuating and 
progressive, and enunciate with as little qualification as if they were 
universal and absolute truths, propositions which are perhaps ap- 
plicable to no state of society except the particular one in which 
the writer happened to live." 

Adam Smith saw and recognised the difference of land tenures'* 
in Europe and America ; but still attempted to force his principles 
on these different states of things. He says : " A gentleman who 
farms his own estate, after paying the expense of cultivation, should 
gain both the rent of the landlord and the profit of the farmer. He 
is apt, however, to denominate his whole gain profit, and thus con- 
founds rent with profit. The greater part of our North American 
and West India planters are in this situation. They farm their own 
estates, and accordingly we seldom hear of the rent of a plantation, 
but frequently of its profit." Adam Smith, like all of his school, 
insists that everything in civilization originates in and is based upon 
"rent, profit, and wages ;" and where he can not find rent, he says 
it must be there notwithstanding. The rent of a farmer, who owns 
the land he cultivates, he says, is that part of his profit which would 
answer to the interest of the cost or present value of his plantation. 
But why insist on calling this rent? In the Urrited States, where 
people, for the most part, work their own plantations and farms, it 



IN EUROPE AND AMERICA. 155 

is only an imaginary distinction. In our state of society, two of 
the three great and fundamental elements of public economy in 
Great Britain and Europe, or which Adam Smith and his school 
have installed in this position, to wit, rent and profit, disappear, 
can not be found, as a general rule, clothed with the attributes with 
which they have invested them ; and even the third, wages, is a 
very different thing here. The whole three, indeed, are here con- 
founded, and merged in one ; and where any things are found to 
answer to the theory of those economists, they are the exceptions, 
not the rule. Why, then, render confusion worse confounded, by 
attempting to force on us a nomenclature of public economy, when 
we can find nothing to answer to these names, bating only excep- 
tions to general rules ? For the most part, ours is a different world 
from theirs. Things here started different, have grown up differ- 
ent, and are different. Even the things among us, which they tried 
to make like unto theirs, while they governed us, we have greatly 
modified since we became independent. It is impossible for an 
American even to understand European economists, while writing 
and expounding their theory of " rent, profit, and wages," unless 
he puts himself to the trouble of becoming familiar with their social 
and political history, running back for centuries. Their nomen 
clature is unintelligible here, simply because it does not apply to 
things with which Americans are acquainted. How absurd, then, 
to force it on things which do not exist in any forms to be recog- 
nised under such names ? We have, indeed, things called rent, 
profit, and wages ; but we have no such system, as European econ- 
omists apply these terms to ; and it is impossible they should be ap- 
plied here, in the same sense in which they apply there, without 
leading to error. 

M. vSay has, also, very naturally recognised the absence, in 
America, of one of the three great elements of public economy 
in Europe, in the following passage : " Families, transplanted from 
a civilized, to an entirely new country, carry with them theoretical 
and practical knowledge, which is one of the chief elements of pro- 
ductive industry. They carry, likewise, habits of industry, cal- 
culated to set these elements in activity, as well as the habit of 
subordination, so essential to the preservation of social order. 
They commonly take with them some little capital, also, not in 
money, but in tools and stock of different kinds. Moreover," he 
says, " they have no landlord to share the produce of a virgin soil, 
far exceeding in extent what they are able to bring into cultivation 



156 THE DIFFERENT STATES OF SOCIETY 

for years to come*" Along with this absence of land-lordism, or 
rent, comes also, and necessarily, the absence of another of the 
three great elements of the European syltem, which they call 
profit, and which refers exclusively to the position and interest of 
the capitalist, or farmer, who stands between the landlord and the 
laborers. It must be seen, therefore, that the second of these 
elements supposes the first, and that, without the first, the second can 
not exist. Consequently, two of the three great elements of public 
economy in Europe, particularly as laid down by British Free- 
Trade writers, are wanting here. It would, therefore, be absurd 
to suppose, that a system founded upon and growing out of these 
three elements, could be adapted to a state of society, where two 
of the three are wanting, and where the three are merged in one. 
The result is simply this : That a superstructure built on three 
supports, can not stand, if two be taken away. In the United 
States, these three, as a general rule, are merged in one, and 
the plan of the architect must be formed anew, and adapted to 
his foundation. 

Though the ancient system of European society is commonly 
supposed to have been broken up, it is only a change of form. It 
may, indeed, have been alleviated. But the image of it remains 
distinctly traced in the theory of society presented by British and 
other European economists, as composed, fundamentally, of land- 
lords, farmers, and laborers, or " rent, profit, and wages." They 
suppose that the land is owned by one class, who receive " rent" 
for it ; that it is cultivated by another class, called farmers under 
their system, who have capital enough to stock it, provide imple- 
ments, and hire laborers, and whose business is that of super 
intendence ; and that it is worked by a third class, formerly called 
" villains," now designated by the name of laborers, but whose 
wages are only enough for bare subsistence, such as is provided 
for the ox or the horse. Such are their fundamental elements for a 
system of public economy. They provide nothing for labor but 
subsistence, and the least possible that will answer that end. They 
do not^ consider that labor is entitled to anything more. It never 
entered their heads, that labor might aspire to independence, to 
proprietorship, even to affluence. They consider that God, or 
society, has given the land to one class ; that an intermediate class 
are to take care of it, and support the first class ; and that a third 
and abject class, born to toil, and nothing else, are to do all the 
work, and support the other two classes, receiving just enough to 



IN EUROPE AND AMERICA. 157 

give them strength to do the greatest service, in the same manner 
as a man feeds his ox or his horse, and for the same object. Such 
was the old system of Europe ; such, virtually, is its system at this 
day, particularly in Great Britain. Such is the system of Adam 
Smith, Ricardo, Say, M'Culloch, and others. 

Hear Adam Smith on this point : " A man must always live by 
his work, and his wages must, at least, be sufficient to maintain 
him. They must even, upon some occasions, be somewhat more ; 
otherwise, it would be impossible for him to bring up a family, and 
the race of such workmen would not last beyond the first genera- 
tion. Mr. Cantillon [one of the British economists] seems, upon 
this account, to suppose that the lowest species of common laborers 
must everywhere earn at least double their own maintenance, in 
order that, one with another, they may be enabled to bring up 
two children ; the labor of the wife, on account of her necessary 
attendance on the children, being supposed no more than sufficient 
to provide for herself. But one half the children born, it is com- 
puted, die before the age of manhood. The poorest laborers, 
therefore, according to this account, must, one with another, at- 
tempt to raise at least four children, in order that two may have 
an equal chance of living to that age. But the necessary mainten- 
ance of four children, it is supposed, may be nearly equal to that 
of one man. The labor of an able-bodied slave, the same author 
[Cantillon] adds, is computed to be worth double his maintenance; 
and that of the meanest laborer, he thinks, can not be worth less 
than that of an able-bodied slave. Thus far, at least, seems cer- 
tain, that, in order to bring up a family, the labor of the husband 
and wife together must, even in the lowest species of common 
labor, be able to earn something more than what is precisely neces- 
sary for their own maintenance ; but in what proportion, whether 
in that above mentioned, or in any other, I shall not take upon me 
to determine." Thus Adam Smith. 

It can not be denied, that this is a very nice, close calculation ; 
and it will be observed, that the case of the slave is brought in as 
the measure of economy in the case ! All that is proposed, thought 
of, is, that the race of laborers shall have enough to perpetuate 
themselves, " lest they should not last beyond the first generation." 
Is it possible, that these givers-out of law for the social state could 
enter into such a conspiracy against the rights of mankind ? Such, 
undoubtedly, is the fact. 

Hear, also, M. Say on this point : ** Simple or rough labor may 



158 THE DIFFERENT STATES OF SOCIETY 

be executed by any man possessed of life and bealth. Wherefore, 
bare existence is all that is requisite to insure a supply of that class 
of industry. Consequently, its wages seldom rise, in any country 
much above what is absolutely necessary to subsistence ; and the 
.quantum of supply always remains on a level with the demand; 
nay, often goes beyond it. Wherever the mere circumstance of 
existence is sufficient for the execution of any kind of work, and 
that work affords the means of supporting existence, the vacuum 
is speedily filled up. . . In this class of life, the wages are some- 
what more than is necessary for bare personal existence ; they must 
be sufficient to maintain the children of the laborer also. If the 
wages of the lowest class of labor were insufficient to maintain a 
family, and bring up children, its supply would never be kept up 
to the complement. . . A full-grown man [a rough laborer] is an 
accumulated capital ; the sum spent in rearing him, is indeed con- 
sumed ; but consumed in a reproductive way, calculated to yield 
the product man. . . To those whose whole income is a bare sub- 
sistence, a fall of wages is an absolute death-warrant, if not to the 
laborer himself, to a part of his family at least." 

It is, then, confessedly, an element of their system, that " a fall 
of wages is an absolute death-warrant, either to the laborer, or a 
part of his family !" 

Hear, also, M'Culloch : " There does not seem to be any good 
reason why man himself should not, and very many why he should, 
be considered as forming a part of the national capital." That is, 
the bones and sinews of the laboring classes, in the same manner 
as slaves, are always classed with chattel property. It is obvious, 
that M'Culloch could not mean anything else. For they who do 
not work, who are not producers, are consumers, and could not be 
viewed in the light of capital, in the eyes of an economist. 

We have, then, in the above-cited passages from Smith, Say, 
and M'Culloch, an explanation of what Ricardo means by the fol- 
lowing part of the citation already made from him : " The propor- 
tions of the whole produce of the earth, which will be allotted to 
each of these classes, under the names of rent, profit, and wages, 
will be essentially different." How and for what reason different ? 
Which of these classes is to be the favored one ? Or which two 
of them ? Which is to be the most, and which the least, favored ? 
An "essential difference" is announced. This is a strong, an 
emphatic expression, composing a part, an element, of a plan of 
society, of a system of public economy, unblushingly proposed to 



IN EUROPE AND AMERICA. 159 

the world, not only as a real state of things, existing from time 
immemorial, and then existing, but to exist for ever, without 
remedy, or the hope of it ! The landlord is to get the principal 
part ; his farmer, or the capitalist who hires the farm, and pays the 
rent, is to come pext for his share, in the shape of profit ; and what 
is the portion of the laborer, under this system? The same as that 
of the ox or horse that drags the plough or the harrow — just enough 
to keep him in the most fit state to work. That is all this system 
has ever yet done ; it is all it ever intended to do ; it is all it ever 
will do, till Europe is revolutionized ; it is all that these economists 
have ever thought of — all they have provided for in their systems. 

Mr. Malthus's theory of population, which is generally respected 
in Europe, particularly in Great Britain, explains all this. He 
thinks men multiply faster than there is room, work, and food, for 
them ; that the masses will fight against each other for employment 
to support life ; that landlords, and all capitalists, may rely on this 
natural strife, among laborers, in bidding for the lowest wages that 
will support existence; and as a consequence, resulting from this 
theory, it may be assumed, that the natural increase of the human 
family is not a blessing, but a curse, to the majority of the race ; 
and that the masses arefdoomed by Providence, to degradation, to 
a state of serfdom or slavery, to want and wretchedness, without 
hope or possibility of relief. 

Rather than be guilty of this libel on Providence — it is indeed 
a very grave and impious one — it would have been much more 
consistent with Christian piety, and with the Christian doctrine of 
morals, it may be said more philosophical, to assume a defect in 
society. It^js shocking to ascribe such a want of wisdom and 
goodness to the Creator ! Mr. Malthus supphes in theory what 
was wanted to sustain the practice of the European world, to wit, 
the hopeless degradation and misery of the masses ; and the Eu- 
ropean economists of the Free-Trade school assume the fact as a 
postulate, putting it in the place of one of the foundation-stones of 
their edifice! They are not ashamed to do this openly — to make 
it visible, prominent, staring out in the face of man and of heaven. 
This theory, recognised and reduced to practice in society, is an 
insuperable bar, a yoke that can not be broken, an iron despotism 
over the masses of mankind.^ 

This extreme necessity of man, resulting from Malthus's theory, 
which dooms the masses to work for bare subsistence, the Hon. 
Mr. Appleton (Nathan) says, is taken by the modern school of 



160 THE DIFFERENT STATES OF SOCIETY 

economists, " such as M'Gullocb, Ricardo, and others, as the 
natural rate of wages. This low and abject state of labor,''' he 
says, " is the original principle from which they have drawn most 
important conclusions as to the foundation of their system, it being 
admitted [by them] that profits go wholly to the owners of capital 
employing labor, and no part of the accumulation to the laborers 
themselves." 

It may, therefore, be assumed as a fact, involving a fundamental 
element in the system of the Free-Trade economists, and pervading 
every part of it, that the masses of mankind are to be regarded as 
mere working machines for the benefit of the few, with no other 
cost than to be kept in the best working order. Such an element 
of public economy, lying at the foundation of a system, being as 
one to three of the capital parts, stops nowhere in its influence and 
control over the various subdivisions and ramifications of that sys 
tem. The only thing that remains the same, is, the position, the 
necessity, the hopeless doom of this working machine. 

If it should be said that some measure of political freedom has 
been granted to the working classes in Great Britain, and in some 
other states of Europe, it amounts to very little upon examination, 
and is rather a mockery of their condition, than a ground of hope 
for future emancipation, under such a recognised system of public 
economy, as above described, in perpetual and full operation. 
The number of freemen entitled to the elective franchise among 
the laborers of Great Britain, is very small, even under their 
boasted reform bill ; and their position, as electors, is not, to any 
considerable extent, independent. They are for the most par* 
under the influence of their employers, in the use of this privilege 
which renders it of little avail to them as a political right. But 
the entire disqualification of the great masses of the toiling millions 
of Great Britain, which is generally allowed to have more fireedom 
than any other country in Europe, is an insuperable obstacle tc 
their emancipation. Some of the smaller European states have, 
indeed, a semblance of freedom ; but even that amounts to but little 
in the general reckoning, and the cases are so isolated and walled 
in by opposing barriers, as to amount to much less in their influence. 
No promise has ever yet dawned on that vast domain of the civil- 
ized world, that is likely to disturb the doctrine of the economists 
in that quarter, or to require a new classification of the human race 
in their system. The landlord and his rent, the capitalist and his 
profit, the laborer and his food, seem likely to continue for ages in 



IN EUROPE AND AMERICA. 161 

the same relations to each other, with the same apportionment of 
the goods of this Hfe, " essentially different," the third having no 
political influence, and few of them any political rights what- 
ever. 

The prevalent principle of land tenures in Europe, together 
with the principle on which land was originally distributed, in con- 
stituting the foundation of the present state of society there, seems 
to lie at the foundation of the Free-Trade system of public econ- 
omy. Look at the three great parts of that system, " rent, profit, 
and wages." 

The original and fundamental principle of land tenures in Great 
Britain, seems to be that they are held of the crown ; that in look- 
ing backward, the crown is a ne jjIus ultra seignory, as a sovereign 
corporation of and by itself; that, except crown-lands reserved, 
the territory was distributed among and bestowed upon the nobles 
by the sovereign, under royal patents, or some appropriate instru- 
ments of conveyance ; that most of the lands have so descended; 
and that the changes of modern times have not essentially dis- 
turbed this state of things. The principal land-owners of Great 
Britain, even now, do not exceed some thirty odd thousand, in a 
population of twenty-eight millions. In the monarchical countries 
of Europe, which comprehend most of its territories, the principle 
of land tenures is substantially the same as in Great Britain, how- 
ever it may run into different forms of application. Hence a sys- 
tem of public economy growing out of such a state of things, and 
adapted to it, begins with this first principle, and is controlled by 
its influence throughout. 

The following definition of " rent," by Adam Smith, is a very 
instructive comment on the bearings of British and other European 
land tenures : — 

" Rent, considered as the price paid for the use of land, is natu- 
rally the highest which the tenant can afford to pay, in the actual 
circumstances of the land. In adjusting the terms of the lease, 
the landlord endeavors to leave him no greater share of the produce 
than what is sufficient to keep up the stock [capital] from which 
he furnishes the seed, pays the labor, and purchases and maintains 
the cattle and other instruments of husbandry, together with the 
ordinary profits of farming stock [capital] in the neighborhood. 
This is evidently the smallest share with which the tenant can pos- 
sibly content himself, without being a loser ; and the landlord sel- 
dom means to leave him any more." ^ 
11 



162 THE DIFFERENT STATES OF SOCIETY 

It will be seen, again, that this is a pretty close calcuktion, as it 
bears on the tenant, orthe farmer as he is called in England, which 
does not mean exactly the same as in the United States. In every 
new lease, the English landlord is as much in the market with his 
land, to get the most he can for it, accordmg to the principles laid 
down in the above definition of Adam Smith, as his tenant is with 
his produce; and he will take advantage of every new adventitious 
value. He may sometimes lose by this principle ; but in a thriving 
country, he generally gains. When a landlord finds seaweed 
thrown up by the tides on the shore that borders his land, though 
furnished by Providence, and falling not within his patent, he nev- 
ertheless taxes his tenant for its value as a raw material for purposes 
of manure. The barren rocks of the Shetla^nd Islands are taxed 
with rent for every fisherman's hut — not for the value of that which 
is above the tide, but according to the value of that which the 
hardy fishermen, in their perilous expeditions, draw up from the 
deep blue sea. They must live, and bring their produce onshore. 
But they must pay the landlord's rent, which is graduated by the 
excess of the productive wealth of the sea, above the fisherman's 
necessities ! Large parts of the British metropolis are now stand- 
ing on the estates of British noblemen, and yield a rent corre- 
sponding with their value at the time of the latest lease. 

The annual income of the duke of Sutherland is ^360,000, or 
$1,742,240; that of the duke of Northumberland, ^300,000, or 
$1,452,000 ; that of the marquis of Westminster, .£280,000, or 
$1,355,200 ; that of the duke of Buccleugh, £250,000, or 
$1,210,000. The English nobility alone, numbering about 400 
peers, not including Irish and Scotch, receive an annual income of 
£5,400,000, or $26,026,000. The annual income of the English 
gentry, not reckoning Irish and Scotch, including baronets, knights, 
country and other gentlemen, is £53,000,000, or $256,250,000, 
or more than one sixth of the aggregate income of all classes of 
the British empire, England, Ireland, and Scodand, which is about 
£300,000,000, or $14,520,000,000. The civil list or annual 
appropriations for the royal household, fixed on William IV., was 
£510,000, or $2,468,400. This grant to Wilham IV., was a 
reform ; as it appears that the annual average of the civil list, from 
1760, the accession of George III., to the demise of George IV., 
was £1,315,000, or $6,364,600. The annual income of persons 
employed under the British government is £6,830,000, or 
$34,673,200. 



IN EUROPE AND AMERICA. 163 

The above examples of income are sufficient to show how the 
wealth of Great Britain is chiefly absorbed by royalty, government, 
the nobility, and the higher classes. The fact that the common 
measure of private wealth in England, is a reference to the " rent 
roll," is sufficient evidence of the relative and comparative im- 
portance that has ever been attached to it, in that state of society. 

When it is considered that this principle of rent pervades the 
entire system of British civil polity, under which the superior 
classes live on their incomes from land and other properties, while 
a second and intermediate class, with a capital of their own, super- 
intend and husband these properties of whatever description, land or 
other, to make all they can out of them, after paying their rent, or 
its equivalent under some other name, it may easily be conceived 
how this superincumbent weight of society, with all the power in its 
hands, bears down on the substratum of the laboring classes. The 
first two classes leave nothing for the third, as has been seen, but 
that which is necessary to support existence, and continue the race 
of laborers. It is not considered that anything more is suitable — • 
certainly not required. The laboring classes are not only consid- 
ered as born to that portion, but they consider themselves as born 
to it. They do not aspire, they have not the moral courage to 
attempt to burst the chains that bind them. From generation to 
generation, for centuries, it has been so, and it is — no doubt with 
a moral certainty — regarded as a reliable element of public econ- 
omy. Every British Free-Trade economist speaks of it as such, 
assumes the fact, incorporates it in his system in one uniform shape, 
and it does not seem to be regarded as susceptible of any essential 
modification. Not even a contingency is attached to it; but it is 
put down as a fixed and permanent fact, that the masses are born to 
serve the few, and to serve diem as masters, in whose power they 
are, and from which they can never escape. 

It has already been suggested, that this state of things is the re- 
sult of an original, primary principle — "rent." Modern changes 
in society have indeed imparted to it some new modifications, as to 
the mode of its operation, and as to the hands in which the power 
is vested. In Great Britain especially, what are commonly called 
" the middle classes," have for a long time been creeping upward 
by the augmentation of wealth among those engaged in commerce, 
in the trades, and in manufactures. Wealth gives power and con- 
sequence ; it becomes possessed of lands and fixed estates ; it as- 
pires to recognition in the higher circles of society ; ultimately it 



164 THE DIFFERENT STATES OF SOCIETY 

gains a standing, in the case of men of acknowledged worth and 
talents ; it steps into the condition of gentlemen, which is a class ; 
and at last some arrive at the highest honors of the state, and are 
perhaps installed among the peers of the realm. But as they rise 
in the world, they imbibe the spirit of ev^ery superior station to 
which they may have attained, and are more jealous of the prerog- 
atives of class than those who are born to them. The substratum 
from which they have emerged gains nothing by their ascent, but 
rather loses. They do not lift others up, but seek to keep them 
down ; and still the old principles of proprietorship, tenancy, and 
villanage, prevail. The working classes are doomed. 

It is quite unnecessary to say, on American soil, and under the 
shadow of American institutions, that American society is directly 
opposed to this. With few exceptions, and those very limited in 
extent, the occupancy and use of the soil of the country are not 
under the tenure of rent ; and the troubles that have risen in the 
state of New York, on account of it, are sufficient evidence of the 
innate opposition that exists to this system in the feelings of the 
people. And yet, as practised here, in the cases above alluded to, 
it is a very different thing from the tenure of rent as it is made to 
operate in Great Britain and in Europe. We are not aware, that 
the obnoxious principles recognised in Smith's definition of rent, 
above cited, have been attempted to be put in force, in this coun- 
try, by landlords. On the contrary, the terms of rent remain the 
same as originally stipulated ; whereas Adam Smith says, that "the 
rent of an estate [in Great Britain] commonly amounts to what is 
supposed to be a third of its gross produce." He, moreover, has 
occasion to represent very frequently, on this topic, that all the in- 
creased values of an estate, by time, culture, and any adventitious 
cause whatever, go to the landlord — are appropriated by him. 
Neither the tenant, nor the laborer, gets any benefit. 

In the United States, the people hold land and other property, 
not of the seignory of a crown, but of themselves, as a voluntary 
corporation existing in the form of a commonwealth, and the indi- 
vidual rights of soil generally vest in the proper persons of individ- 
uals, without any superior. The aim, ambition, pride of the Amer- 
ican people, tends toward proprietorship, be it of a larger or smaller 
domain ; be it of a great or little amount of property ; be it of a 
costly mansion or an humble cabin ; be it a fisherman's boat, or a 
horse, or a cow, or a dog and rifle. In other words, it is the spirit 
of independence, which they cherish. This is the genius of the 



IN EUROPE AND AMERICA. 165 

people, of their institutions, of the government ; and from the foun- 
dation to the top stone of the social edifice, it is a perfect contrast 
to the state of society in Europe. And Americans can afford it; 
it is in their power to be independent. Ages, all time may roll 
away, before it is likely that one American will be able to force an 
other into his service, from the necessity of the latter, and dictate his 
wages. 

It must be obvious, that such a state of society can not be thrown 
out of consideration, in the construction of a system of public econ- 
omy for it, if it is to be adapted to it ; nor can it be said, that these 
are not elements. They are fundamental elements. All the Brit- 
ish and other European economists begin with these very things, 
in forming the foundations of their respective systems ; or rather 
with the things which occupy these places — different, indeed, from 
those found in the United States, as can well be imagined. Here, 
laboring men work for themselves in all cases, and for wages in 
which they have an equal voice, and can refuse without starving, 
or being reduced to want ; for there is always some alternative open 
before them. They can always retire on the unoccupied lands of 
the West, and be independent. This chance for ever secures their 
independence. But, for the most part, in the United States, the 
working men are found cultivating their own lands ; or working in 
their own shops; or husbanding pursuits, in which they are masters 
and proprietors ; and most of those who work on hire, for wages, 
do it not only to acquire capital to set up for themselves, but on 
such terms as will enable them to do it. Whether working on wa- 
ges, or on their own estates, they are independent. They are lords 
of their own position and destiny. It is this independent position 
of the American people which constitutes one of the most important 
elements of a system of public economy adapted to them, in the 
same manner as European economists have deemed it pertinent 
and imperative to go back to the foundation of society, and take 
things as they find them in their origin and history. 

It would appear that Adam Smith himself recognised, at least in 
principle and in some degree, this fundamental difference of soci- 
ety in Europe and America, when he speaks of " planters in Amer- 
ica as being generally both farmers and landlords, where rent is 
consequently confounded with profit." 

No such state of society as that for which Adam Smith, Ricardo, 
and Say wrote, is found in the United States, and it would not be 
tolerated here for a moment. It is, indeed, that very state of thmgs 



166 THE DIFFERENT STATES OF SOCIETY 

that was forsworn in the American revolution, and against which 
the new government, institutions, and laws, set up at that epoch, 
and afterward matured and permanently established, were expressly 
framed to guard, and guard for ever, with jealous care, that they 
should never obtain footing^ ao:ain on American soil. This new 
and reformed state of society, commonly and not inaptly called re- 
publicanism, rejects with indignation and scorn the idea of those 
relations which constitute the basis of the system of Smith, Ricardo, 
Say, M'Culloch, and others of that school. It was natural enough, 
it may be said it was necessary, at least apparently unavoidable, 
that they should take such premises as they were furnished with, 
on which to erect their edifice. It is evident what those premises 
were, because they are distinctly laid down, as observed in the 
foregoing citations from them ; and it is also evident that a system 
built upon such premises, must also correspond with them. But 
the American system is directly the opposite of this. There is no 
resemblance in the premises, and none in the structure raised upon 
them, if it be properly built. 

Nor does it avail to say, that we make more, in our argument, 
of the social state, than we are entitled to make, on such a subject 
as that of public economy, which it will, perhaps, be said, is of a 
commercial rather than of a social character. For it may be ob- 
served in reply, that these Free-Trade economists do themselves 
start on the social relations as a basis, and very properly so, because 
out of these relations come these commercial results, the causes, 
combinations, and course of which, it is the main design of public 
economy to expound. On this great theme, it is in vain to attempt 
to separate the moral from the physical, and the social from the 
commercial. Certainly there is no demand for it, since no party in 
this debate has ever set the example. It is the original frame, and 
the subsequent legislation of a commonwealth, that make it pros- 
perous or otherwise ; and prosperity, used in such a connexion, it 
is not denied, is a commercial term. 

What we have to say, then, in elucidation of the American sys- 
tem, as it appertains to this point, and in contradistinction from the 
system of the economists above cited, is, that the former is opposed 
to the latter : opposed in the original elements of the social state ; 
opposed in the organization of those elements ; opposed in the main 
objects of such organization ; and opposed in its grand results, moral, 
politica , and commercial. As it can not be denied, that the com- 
mercial results are the ultimate objects which most concern all par- 



IN EUROPE AND AMERICA. 167 

ties, as well as that they are the great aims of public economy, so 
neither can it be denied, that they are influenced and controlled by 
social organization ; and it is this controlling power which renders 
it necessary to erect an American system of public economy on the 
American basis. 

After the descent of the barbarians of the north, on the west and 
south of Europe, the old state of society was broken up, and re- 
mained in confusion for several centuries ; but finally settled down 
into the feudal system under the usurpation of chiefs or leaders, as 
lords of the territory, marked out by consent, or determined by 
strife. Out of this state of things grew up a more audacious usur- 
pation, in the shape of the present comprehensive*estates of Europe, 
called monarchies, kingdoms, and empires — most of which, in- 
deed, existed contemporaneously with feudalism, though not with 
so absorbing an influence as subsequently. 

" This original engrossing of uncultivated lands," says Adam 
Smith, " though a great, might have been a transitory, evil. They 
might soon have been divided again, and broken into small parcels, 
either by succession, or by alienation. The law of primogeniture 
hindered them from being divided by succession ; and the intro- 
duction of entails prevented their being broken into small parcels 
by alienation. . . In those disorderly times, every great landlord 
was a sort of petty prince. His tenants were his subjects. He 
was their legislator and judge in peace, and their leader in war. . . 
The right of primogeniture still continues to be respected, and as 
of all other institutions it is the fittest to support the pride of family 
distinctions, it is still likely to endure for many centuries. In every 
other respect, nothing can be more contrary to the real interest of 
a numerous family, than a right which, in order to enrich one, beg- 
gars all the rest of the children. Entails are the natural conse- 
quence of the law of primogeniture. They were altogether unknown 
to the Romans. . . In the present state of Europe, when small as 
well as great estates derive their security from the laws of their 
country, nothing can be more completely absurd. They are founded 
upon the most absurd of all suppositions, viz., that every successive 
generation of men have not an equal right to the earth, and to all 
that it possesses ; but that the property of the present generation 
should be restrained and regulated according to the fancy of those 
who died, perhaps, five hundred years ago. * * * 

" In the ancient state of Europe, the occupiers of the land wer^ 
all tenants a' will. They were all, or nearly all, slaves. They were 



168 THE DIFFERENT STATES OF SOCIETY. 

supposed to belong more directly to the land, than to their mastei 
They could, therefore, be sold with it, but not separately. They 
could marry, provided it was with the consent of their master. If 
he maimed or murdered any of them, he was liable to some pen- 
alty, though generally but to a small one. They were incapable of 
cquiring property. Whatever they acquired, was acquired to their 
master, and he could take it from them at pleasure. They could 
acquire nothing but their daily maintenance. This species of slavery 
still subsists in Russia, Poland, Hungary, Bohemia, Moravia, and 
in other parts of Germany." 

It is easy enough to see, that this kind of slavery, though changed 
in form, and in many particulars mitigated, still subsists in western, 
southwestern, and southern Europe, as well as in the parts above 
mentioned by Adam Smith. The spirit and practical operation of 
society do not change with the change of forms, till ages, sometimes 
centuries, have rolled away. It is from such a state of things that 
European society, as a whole, has come down, and it still exhibits 
almost everywhere like elements, often the same in substance. 

How happens it that in Europe, they who have done all the 
work, have little or no property, external to their own persons, not 
always that ; and that they who have done little or no work, have 
nearly all the property — nearly all the wealth of society? The 
inference is natural, that there is something wrong in this. Pro- 
prietorship seems to have passed from the natural proprietor to the 
unnatural one, and the order of nature and of Providence — for 
how can they disagree ? — seems to be reversed. This perversion, 
this violence that has crept into and incorporated itself with the 
social fabric of the old world — which has been one of the great 
perversions of the social state from time immemorial — is being 
rectified in the constitution and career of American society, and 
they who work can not only call themselves but all their fair 
earnings, their own. It is well that this reform should be gradual ; 
that this renovation of society should be effected by a new con- 
struction on a more just basis ; that this violence should be removed 
without violence. Restore to man his rights, and he will make 
his own way to the rectification of the errors of the species. But 
how can he have his rights, except under a just and equitable sys- 
tem of public economy ? 



EDUCATION IN THE UNITED STATES. 169 



CHAPTER XL 

EDUCATION AS AN ELEMENT OF PUBLIC ECONOMY IN THE 
UNITED STATES. 

Education a Thing of Commercial Valae. — The American People the Original Statesmen 
of the Country. — The American Republic an Experiment for the World. — Difference 
between the European and American Theorj' of Society. — Knowledge makes the Dis- 
tinction between Treemen and Slaves. — Character of the First Settlers of this Country. — 
They were Men of high Culture. — General Education made the Basis of their New 
State of Society. — Education the Power that achieved American Independence. — It is 
the most Important of all the Elements of an American System of Public Economy. — 
A System of Universal Education may not at first Produce Examples of the highest 
Culture. — The American System gives Etjual Chances to All.— System of American 
Schools and Colleges. — A Protective System of Public Economy indispensable to the 
American System of Education. — Education and Virtue Concomitants in a Nation. — 
Comparative Condition of European and American Population, Physical and Moral. — 
Education makes the Difference. 

It has already been shown that the rights of the people fall 
within the range of public economy, because there is a commercial 
value in them; that it is on account of this value that they become 
important and worthy of being asserted and maintained ; that it was 
commercial value alone that constituted the ground of controversy 
between the American fathers and the British crown.; and that, but 
for this species of value, wrested from the colonists and appro- 
priated by the crown, there would never have been any controversy. 
It has also been shown, that these rights are not sordid or less 
worthy of respect on that account ; but, on the contrary, that no 
rights in political society, which are of any consequence, can be 
shown to have any intrinsic or palpable value which is not of this 
kind. Even the honorary rights of monarchical and aristocratical 
forms of society, such as those of Great Britain, lose all their im- 
portance, and become contemptible, when stripped of the com- 
mercial values which sustain them in their position, such as the 
estates of the nobility. 

It is for the same reason that education becomes one of the most 
important elements of public economy in the United States — of so 
great importance as to make it worthy of a separate and special 
consideration. 

It is an old and well-recognised maxim, running back to the 
earliest date of our history, that a republic an or democratic state 



170 EDUCATION AS AN ELEMENT OP PUBLIC ECONOMY 

of society — we use these terms as synonymous and interchangeable 
— must rest on the intelligence and virtue of the people. The 
reasons are obvious. The people being, directly or indirectly, 
immediately or mediately, the source of power, the originators of 
the government, and the electors of rulers, legislators, judges, and 
magistrates — of all branches of the supervising power — must be 
qualified by their intelligence to discern the fitness of those in 
whose hands they commit these important trusts, and have need 
also of a corresponding amount of virtue to discharge these duties 
with fidelity to that state of society which is, by such means, en- 
tirely in their hands. In a democratic community, the people are 
the original and fundamental statesmen. It is impossible that the 
government should be better, or in any essential degree more in- 
telligent than they are. The ancient and inspired maxim, " like 
people, like priest," can not be more true in church than in state. 
In a republic, the character of the government uniformly exhibits a 
reflex image of the character of its electors, and vice versa. 

It is admitted on all hands, and all the world over, that the North 
American republic is a grand experiment to determine w^hether a 
people can have intelligence and virtue enough to govern them- 
selves, and that the final solution of this problem will decide the 
fate of the world, for or against a democratic state of society, for 
centuries to come, if not for ever. 

It need not be said, that the intelligence and virtue of the people 
depend upon education. It remains to show, in w4iat respects, and 
how far, education becomes an element of public economy in the 
United States. We are not prescribing rules for European or 
other foreign nations. The withholding or lack of popular educa- 
tion among them — for it is the education of the people generally 
of which we speak — may be as necessary to their theory of society, 
as the enjoyment of it is to ours. It has already and frequently 
been stated, and should be constantly borne in mind, that Adam 
Smith and his school have adapted their system of public economy 
to the state of society with which they were surrounded, and not 
to that which exists among us. It is impossible, under their system, 
that general education should prevail — as much so as that it should 
prevail among slaves. There is no provision for it. It is the bare 
subsistence only of those who do the labor of society which they 
have provided for. In the first place, they have not a democratic 
state of society ; next, they do not propose to have it; thirdly, they 
make no calculation for it; and lastly, as the working classes, under 



IN THE UNITED STATES. 171 

their system, have little or nothing to do with government, their 
education is not deemed important. On the contrary it is system- 
atically suppressed, because it is reckoned dangerous. It must be 
ieen, therefore, that the condition of society in the United States, 
in these particulars, is diametrically opposite.* 

But how is education here an element of public economy? 
How does it appear, that it has a commercial value in it ? First, 
because it costs something. Next, because it is really worth some- 
thing. It is capital, and capital of the most productive kind. But 
thirdly, and above all, because, in the United States, the education 
of the people is the only secure guardian of all their other rights, 
which, so far as they are worth maintaining, are so only because 
they have a commercial value in them, as before shown. 

Knowledge is power. There is little difficulty in holding the 
ignorant and debased slave fast in his chains. He does not know 
bow to gain his rights — how to devise ways and means ; and being 
depressed, dejected, demoralized, he has not the courage to assert 
them. The fact that one master, as is often the case, knows how 
and is able to hold ten, or twenty, or fifty, or a hundred slaves in 
subjection, and to keep them in fear of himself, so that they dare 
not disobey him, is the simplest and most forcible illustration of the 
power of knowledge, in the application now under consideration. 
The difference is chiefly in knowledge ; though it is not to be de- 
nied that some of it is to be ascribed to the moral force of the 
machinery of society. If every one of these slaves were equal to 
his master in knowledge, and in the growth and vigor of the social 
qualities, it is not to be supposed they could long be held in bond- 
age, without other and foreign forces not required in their present 
condition. 

The original settlers of this country from Europe — especially 
those from Great Britain — were men of intelligence and strong 
virtue. Many of them were persons of as high culture, and of as 
much chivalry of character, as any that were left behind them. It 
may be said, that they were men of the strongest character of the 
times that produced them ; and those who followed in their train, 
were men of the same stamp. The motives of emigration then 
were of a high and social character, and not such as now pour 

* Notwithstanding the changes which are taking place in Europe, since the 
French revolution of 1848, with an apparent approximation toward a democratic 
stale of society, our argument with the European economists generally, of the 
Free-Trade school, in particular, remains in full force. 



172 EDUCATION AS AN ELEMENT OF PUBLIC ECONOMY 

upon this continent the floods of European paupers and culprits. 
It was mind of the highest order, which could not endure the 
chains of European despotism, and which came here for freedom. 
The object of their coming, and the qualifications which fitted them 
for the enterprise, are directly in point of the argument in which 
we are now engaged. It was their high culture and eminent virtues 
which enabled them to lay the foundation of that stupendous sys- 
tem of political society and of public economy, which has sub- 
sequently and gradually grown up on their endeavors and their 
plan. Freedom was their end, and the means which they ordained 
to secure it, were schools and religion, education and the virtues 
of Christianity. The history of the colonies, from the earliest 
settlements, down to the revolution and establishment of American 
independence, is replete with proof of this assertion. There arose, 
therefore, from the first, a state of society not before known in Eu- 
rope or elsewhere — a republican or democratic society in which 
there were no uneducated classes, and no laboring classes which 
did not comprehend the whole community. All went to school, 
and all worked when old enough ; and on no point were the people 
more thoroughly educated than on the principles of free govern- 
ment. The oppressions of the old world drove out its own sons 
from its own bosom, and under its own charters, to set up a school, 
which must necessarily, in a course of time, subvert its authority, 
and become independent, because the emigrants brought away all 
that was good, and left behind all that was bad. The elements of 
this new state of society were all healthy, and full of infant purity. 
While the old world, from a vitiated and decrepit constitution, 
tended to decay, the new, purged of parental diseases, sprang up, 
with giant strides, to giant vigor. Instead of the old leaven of Eu- 
ropean economists, that intellectual and moral culture belongs only 
to the higher classes, and that the working classes require nothing 
but bare subsistence like cattle, schools were provided for all — all 
were educated — trained to knowledge and virtue as a preparation 
for the working time of life. It was a republican or democratic 
state of society from the first, and continued to be such, till the 
struggle arose between the colonies and the mother-country, which 
resulted in American independence. 

It is to this point of American history that attention is especially 
challenged to elucidate our argument. And in answer to the 
question, what was it that prompted, sustained, and finally achieved 
American independence ? — we say, it was the diffusion of general 



IN THE UNITED STATES. 173 

education among the people, and nothing else. Suppose the people 
had been as ignorant and debased as the working classes of Europe, 
what could they have done? Besides the moral impotency of 
such a condition of society, poverty is an invariable concomitant. 
The people generally could not have been as ignorant without 
being as poor ; and along with this poverty of the mass of the 
people, would have existed rich and dominant masters, allied by 
interest to the British crown, in the same manner as they are now 
in Great Britain and other European nations. Nothing could have 
been hoped for, and nothing achieved, in such a state of things, by 
declaring independence ; but the result would have been an easy 
and speedy victory on the part of the crown, and a tighter riveting 
of the chains of slavery. Such invariably, in all history, has been 
the end of all such struggles between such parties. 

But the American people were educated ; they were men of 
full stature, intellectual and moral ; they were for the most part 
men of substantial, though of moderate independence ; they had 
imbibed the principles of freedom, and understood them ; and 
when the British crown asserted its oppressive, tyrannical claims, 
and began to put them in force, it was soon found that the colonists 
were not of that mean and debased class who know not how to 
assert and maintain their rights. It was their intellectual and moral 
training — a training of more than a century — which qualified 
them to rise at once from the condition of dependent colonies, to 
that of an independent nation, and which enabled them to sustain 
a contest for seven long years against the most powerful nation of 
the world, to be acknowledged in the end as an equal and a rival. 

There is a great principle arising out of this history, which ap- 
plies to the subject now under consideration. This was not a 
chance triumph of the American arms — of the weak against the 
strong; but it was the result of the operation of a potent element 
inherent in American society, viz., the intellectual and moral 
culture of the people. The physical odds against them was im- 
mense ; but having to contend against this moral power, it was 
shivered and subdued. Nor does it detract at all from the force 
of this reasoning to say, that the warlike barbarians of the north 
of Europe once overran and reduced the cultivated and refined 
nations of the south ; for the latter, as admitted by all, were ready 
to perish through their own debauchery and effeminacy. Besides 
that general education did not prevail among them, the seeds of 
decay had been sown for many centuries, and the final dissolution 



174 EDUCATION AS AN ELEMENT OF PUBLTC ECONOMY 

only awaited an adequate shock. The descent of the northern 
barbarians was one of those retributions of Providence, which 
sometimes sweep over the earth like a tornado, when vice and 
crime have nearly dissolved the long standing fabrics of the social 
state. But the contest of the American colonies with the British 
crown, was as the strife of young and vigorous manhood against 
decrepit age, prompted and sustained rather by the morale ot 
youthfulness, than by the skill and preparations of experience ; but 
the efficacy of that morale consisted in the great elements of which 
we are now speaking. Slaves rarely rise against their masters with 
success ; and success may prove their greatest misfortune. The 
toiling millions of Europe may toil on for ages and for centuries, 
as they have done, to minister to the power of European govern- 
ments, to the splendor of its nobility, and to the luxury of its 
superior classes, without the slightest hope of emancipation from 
their debased condition, till the blessings of education are diffused 
amono; them.* It was intellectual and moral culture alone that 
reared this republican empire, and gave it a permanent rank among 
the nations of the earth. 

These views naturally lead us to the consideration of that 
state of public or national economy, in that particular which is ne- 
cessary to secure and sustain in perpetuity a sufficient amount of 
intellectual and moral culture among the people, to warrant the 
continuance of a free government, and of free institutions. How- 
ever important the numerous ramifications of public economy 
which are discussed in this work, may seem to be, all of them to- 
gether are less important, dwindle into insignificance compared 
with this. This, indeed, lies at the foundation, constitutes the 
platform of the whole system. Without education, without morals, 
without religion — and education is the instrument of morals and 
religion — what is civilization? Or, rather, without these, how 
c&n there be civilization ? These and their appurtenances consti- 
tute civilization, and in proportion as they are advanced, civiliza- 
tion advances. 

It is not denied that there may be high and even superlative 
degrees of intellectual and moral culture, specimens of the purest 
morals, and examples of religion worthy of imitation and of all 

* We should be extremely glad, if the success of the present endeavors, 1848, 
to establish republican institutions in Europe, should prove that we have made 
too strong a statement here; but even that would not detract from the principle 
of our argument. 



IN THE UNITED STATES. 175 

respect, around the thrones and under the shades of the most 
absolute despotisms. It may even be true, that these examples of 
the highestculture, owe their excellence to the patronage of princes, 
and to the influence of a concentrated power, the means of which 
were wrung by the few from the hard and servile toil of the mil- 
lions. It may also be true, that the refinements of civilization, in 
such circumstances, and under these concentrated influences, shall 
be in excess of what they would otherwise have been, in a given 
time, if education had been more general and comprehensive, 
and if the chances of high culture had been open to all. Great 
bodies can not move with so much rapidity in a given direction, as 
' small ones, when the same amount of force is applied to each. 

But it need not be said that this is not the intended economy, 
the plan of American society. It was not devised for the few, but 
for the many ; not for a select and privileged corps, but for the 
millions. General, popular education, is the great scheme laid out 
for this republican empire. If there be any feature more distinct, 
more prominent, and more observable, in the social structure of this 
great commonwealth, than any other, it is that of equal chances in 
life to all ; that a child shall not be born to ignorance, for want of 
opportunities to acquire knowledge ; that he shall not be doomed 
to a low condition because such was the lot of his parents ; and 
that there shall be no insuperable impediments of a social and 
moral nature to his advancement in the social state, to any eleva- 
tion, not excepting the highest within the scope of a just and laud- 
able ambition. 

The system of common schools, early set up in this country, 
coeval indeed with American civilization, handed down from gen- 
eration to generation, provided for as the first care of the state, 
watched over with paternal solicitude, nurtured, endowed, edified, 
and never sufiered to decline, but always put forward with vigor 
and efficiency, is the cradle of those chances of which we speak. 
On this broad foundation, common to all, has been erected a sys- 
tem of select and higher schools, up to the college and university, 
which are also within the reach of all, by reason of a system of 
public economy, which it is our special purpose in this chapter to 
notice ;, not, indeed, so much within the reach of all, as the com- 
mon schools, but yet not excluding any, nor presenting insuperable 
obstacles to any. The poorest and meanest born of the land, 
prompted by innate ambition, and developing hopeful talent, can, 
and do often, pass through all the stages of education, from the 



176 EDUCATION AS AN ELEMENT OF PUBLIC ECONOMY 

common school till they have graduated with honor at the highest 
seminaries, and entered upon the graver responsibilities of life, to 
contend, in open and fair field, with the best born, for the highest 
prizes of the social state, whether of wealth or of influence. And 
it is an attribute of American society and institutioits, to favor and 
help forward merit that emerges from obscurity and strives to rise. 
The common school is the basis of all ; the genius of the gov- 
ernment is the parent of all ; and the joint operation of the two 
crowns all. 

We come, then, to the main point which now claims to be con- 
sidered, viz., that a protective system, as expounded and illustrated 
in other parts of this work, in its indissoluble connexion with the 
ability of the people, imparting and securing that ability, to avail 
themselves of all these advantages, is the only means by which 
this great end of American society can be realized. 

It has been seen, that, as a general truth, the American people 
WORK for their living ; that they depend on labor, in one form or 
another ; and that their fortune is vested in the rewards of their 
own personal exertions. The difference between the condition of 
American and that of European labor, the former as an independ- 
ent agents and the latter as an agent of power ^ is elsewhere pointed 
out. It will be seen, that the only provision made for labor by 
European society, and by the Adam Smith school of economists, 
is that of a mere physical existence, as in the case of a slave, 
which dooms the laborers, as a class, to live and die, like slaves, in 
the condition in which they are born, or in which they begin to 
work. Without education themselves, they are unable to educate 
their children, except for their tasks. Whereas the condition of 
American labor is that of independence. If American free laborers 
are uneducated, it is not because they have had no opportunity 
to improve themselves ; and if they do not educate their children, 
it is not because they are unable. Indeed, in the common school, 
which most of the states provide, especially in New England, it 
costs them nothing, except their rate of assessment as to property, 
which throws the burden on the rich, and exempts the poor ; or 
if the schools are endowed, as well as free, as in some places they 
are, they are a tax to nobody ; or partly endowed, as in Connecti- 
cut, Massachusetts, New York, and we believe some other states, 
the tax is so much lighter to those who have to pay. But the sys- 
tem is designed to provide education for all, the poorest as well 



IN THE UNITED STATES. 177 

as those who are better off in life. It is a part of the economy of 
American society. 

The proposition, therefore, which we here assert and propose to 
maintain, is, that a protective system is the great power that sus- 
tains, and the only cause that can secure, general and popular 
education in the United States ; and consequently, that it is the 
only power that is capable of preserving the liberties of the coun- 
try. The second part of this proposition has been before consid- 
ered, under its commercial aspects. Its moral features also claim 
attention, although both views of the subject ar« so intimately 
blended, that it is not easy to separate them even in discussion ; 
much less in their practical operation. 

A cursory glance at the physical, moral, and social condition of 
the laboring classes of Europe, will cast the light of a strong con- 
trast on the condition of American free laborers, in the same as- 
pects ; and it need not be said, that these classes here, include 
nearly all — are the people. First, the laboring classes of Europe 
are abject in their social position. Few of them have any political 
rights, even nominal ; none, to speak of, more than this, which is 
of no account in its beneficial results to themselves. And they feel 
their abject condition ; and along with this feeling, as a fruit, comes 
an abject, hopeless state of their minds. This oppressive sense of 
social degradation, is that which unmans man — divests him of 
pride, of ambition, of aspiring views, of self-respect, of all great 
and noble purposes, and makes him a slave — a mere tool of those 
for whom he lives and toils. Along with this social degradation, 
comes moral debasement — abandonment to vice and crime. Where 
there is no reward of virtue, man will not be virtuous ; and with 
the blight of his prospects, his passions are corrupted. Hence the 
low tone of moral feeling, and the increase of crime, among the 
degraded classes of Europe. Uninstructed, and unambitious of 
moral and social elevation, man is as much more brutal than the 
brutes, as his faculties are more inventive ; and out of his prolific 
nature, thus perverted and abused, grow savage propensities, and 
diabolical deeds. The apology for forcing and keeping him down, 
springs from the wrong of having deprived him of the means of 
education, and of incentives to better conduct. How could he do 
better, in the physical condition of a slave, and forced, for want of 
time and means of improvement, to grow up and live in ignorance ? 
Two thirds of the fair reward of his labor, being that which was 
12 



178 EDUCATION AS AN ELEMENT OF PUBLIC ECONOMY 

necessary to make a man of him, to raise and put him forward in 
moral and social existence, has been, as shown in this work, usurped 
and absorbed by his oppressors, to create that great chasm, that 
impassable gulf, that lies between him and them. 

Turn now to the condition of the American people, who, as the 
people, are also the laborers of the country. In the first place, 
their physical condition is one of comfort, of independence, and of 
thrift, because they work for themselves, and have the reward of 
their own labor. In the next place, being in such a condition, they 
have time to think ; and their fathers having been in a like condi- 
tion, they were sent to school, and qualified to think. Seeing the 
worth of knowledge, and enjoying its satisfactions, they, in turn, 
send their children to school, because they love them. All — one 
generation after another — are educated. They are brought up in 
comfort, taste and realize the blessings of intellectual and moral 
culture which they have enjoyed, and are not only constantly im- 
proving in knowledge by books, that captivating employment of 
leisure and independence, and by the periodical emanations of 
the press, but they are able to educate and prepare their children 
for any position in life which they choose to assign to them, as none 
are barred to any class. By industry and economy, they can not 
only live in this way, and in this way bring up their families, but 
they can acquire wealth, enlarge their estates, and extend their in- 
fluence by a career of exemplary morals and conduct. Every 
stage of life is one of increasing interest to them, presenting more 
powerful incentives to virtue, to moral and social eminence, and to 
leave behind them an independence for their children, and a good 
name for themselves. All along, in the progress of their lives, they 
find themselves free and independent members of a political com- 
monwealth, in the government of which they share, and which se- 
cures to them all these blessings. Withal — not the least, but the 
greatest — they are not only educated for time, but for eternity. 

What is it, that has given to the iVmerican people a position, and 
secured to them a condition and destiny, so widely different from 
the same things with the toiling millions of the European world? 
The answer to this great question, is simply this : The former en- 
joy the reward of their labor, while the latter are robbed of it. The 
whole truth of this subject is embraced in this single and brief sen- 
tence. It is impossible to find anything appertaining to the ques- 
tion, which is not comprehended in this answer. 

It is seen, and abundantly proved, in the progress of this work, 



IN THE UNITED STATES. 179 

that a protective system is the only shield of this position and con- 
dition of the American people ; and that the direct and inevitable 
tendency of Free Trade, is to put American and European labor 
to work on the same platform, in the same field, for the same mar- 
ket, on the same terms, with a like result in the physical, intel- 
lectual, moral, and social condition of both. This result is inev- 
itable, because it comes from the operation of a great commercial 
principle, which governs the whole commercial world ; and about 
which there can be no uncertainty, because it is a result told by 
figures, in connexion with the moral certainty, that buyers will al- 
ways trade as cheap as they can, and sellers as dear as they can. 
Universal Free Trade makes one market of the wide w^orld, and 
no laborers for that market can have better chances than others ; 
but all will be on the same level. 

But it would be impossible, by such a concession, to elevate the 
condition of the laboring classes of Europe. Their oppressors 
would still have the same hold upon them ; and with that grasp, on 
a basis of Free Trade, they would draw into their power, and un- 
der their hand, the whole American people, to the loss of all th6 
treasure, agony, and blood, that have been spent for a rescue. 



180 PROTECTION NOT RESTRICTION, BUT EMANCIPATION. 



CHAPTER XII. 

PROTECTION NOT RESTRICTION, BUT EMANCIPATION. 

What is meant by a Restrictive System? — It is a Misnomer as applied to Protection,— 
Free-Traders and Protectionists in the United States are both after the same thing. — 
The true Relation between Capital and Labor. — The most perfect State of Society- 
Capital is Labor in Repose. — Protection of Capital is the Protection of Labor. — An 
American Protective System a Rescue from a Foreign Restrictive System. — American 
Labor can not be free, w^ithout Protection. — The Protection of one American Interest 
can never injure anotlier American Interest, but benefits all. — Examples and Proofs. — 
The Position of American Capital and Labor in Relation to Foreign Capital and Labor. 
Consideration of the Maxim that a Nation must buy in Order to sell. — The Prosperous 
and Rich buy and trade most. — Protection makes us rich ; the vv'ant of it makes us poor. 

A Rule for one Nation may be bad for another. — Why does Great Britain preach 

Free Trade ? — Adam Smith began right, and ended wrong, — He leaped to his Conclu- 
fiion from False Premises. 

Much of the force of the argument of Free-Trade economists, 
rests on the assumption of what they call a restrictive system, to 
which they are opposed. Now, if we are able to show that an 
American protective system, so far from being restrictive on 
American industry, American labor, and American interests, oper- 
ates, on the contrary, to set them free ; to letve them untram- 
melled ; to give them full scope for action and profit ; to rescue 
them from disadvantages and hinderances placed in the way of their 
objects ; to secure their natural, social, and political rights ; to 
exempt them from restriction, the very thing complained of as the 
effect of a protective system — in other words, to accomplish the 
very end of Free Trade, as averred by its advocates, and as un- 
derstood by nearly or quite all those Americans who are in favor 
of it; then, clearly, it will result, that Protectionists and Free- 
Traders in the United States, are both after the same thing, and 
differ only in the w^ay of obtaining it. It is the object of this chap- 
ter to show that such is really the fact. 

We have proved abundantly, in other parts of this work, that 
the chief disadvantage under which American industrial efforts 
labor, is the greater cost of money and labor, in other words of 
labor itself, in this quarter, as compared with its price in foreign 
parts. It is the difference between the freedom and the bondage 
price of labor. This difference affects caphal as well as labor, in 
the same manner and degree ; for we have elsewhere shown that all 
capital is the product of labor, the cost of w^hich must necessarily 



PROTECTION NOT RESTRICTION, BUT EMANCIPATION. 181 

be graduated by the price of labor. By the rights or institution 
of property, as secured by every civilized society, capital or prop- 
erty when acquired by industry and prudence, comes to occupy 
the position of the employer of labor, in order that labor, in its 
turn, enjoying a freedom price under adequate protection, may rise 
to the same condition, by the same means. This is the American 
wheel of fortune, where the rights of primogeniture and of entail 
have been abolished by fundamental law. Human sagacity, after 
having removed all exclusive prerogatives of birth, and all right 
in the owners of property to entail its descent, has not been able 
to invent a better or more equal state of society than for men on 
such a basis, to rise in the world by their own industry and econ- 
omy. In this way, labor capital, which is the parent of all other 
capital, holds its chances in reversion, to become the possessor and 
controller of other capital, and itself, in turn, the employer of labor. 
These are the rights of labor. It would be hard, indeed, that the 
power to labor, which, when applied, is the producer of all the 
means of enjoyment in civilized society, should never itself be able 
to come to such enjoyment. The very design of American society, 
is to keep open these chances, which European society for ever 
bars, as a general rule. Exceptions to a rule only demonstrate its 
existence and sway. 

Now it is evident, since capital, the product of labor, when 
acquired as above described, in any considerable amount, occupies 
the position of the employer of labor ; and since capital, so acquired, 
is nothing more or less than labor in another form or state, that is, 
in a condition of productive repose ; and since this capital must 
have cost in proportion to the price of the labor that produced it; — 
it is evident, we say, first, that this capital can not be employed in 
the same ways with foreign capital, which has costs only half as 
much, without protection ; and, secondly, it is evident that the pro- 
tection of this capital is the protection of labor itself, not only be- 
cause it is labor in another form, as being its product, but because 
it can not employ labor, in these ways, without protection. When- 
ever, therefore, American capital asks for protection, in this, that, 
or the other pursuit, no matter what, it is labor, and nothing else, 
that asks for it. And what for? To rescue it from the restriction ^ 
or the restrictive system, under which it lies and labors, by the ex- 
istence and operation of cheap foreign capital and cheap foreign 
labor ; in other words, to give and secure freedom to American 
labor. It can not be free unless it is protected ; but the tendency 



182 PROTECTION NOT RESTRICTION, BUT EMANCIPATION. 

and effect of this foreign system, operating on American labor 
restrictively, is to keep it under and keep it down. It can not 
rise, it can not enjoy its rights, because it is under the operation 
of 2i foreign restrictive system ; that is, restrictive relative to itself. 
It will be seen, the>|(^fore, that the professed objects of the advo- 
cates of Free Trade and of Protection, in the United States, are 
identical. Both aim at a rescue from a restrictive system. It 
must also be seen that Protection is the only way to gain that end. 

But it is said that a protection of one or more interests, is a re- 
striction on, and a disadvantage to, one or more other interests. 
We have proved, in other chapters, that an American protective 
system can not injure, but must necessarily benefit, all interests of 
*he country ; that protective duties are not taxes (which is the only 
objection that ever was or can be made against them) ; and that 
they are a rescue from an enormous system of foreign taxation. 
We need not, therefore, undertake to prove here what is proved 
elsewhere ; but we are entitled to assume it, so far as the present 
argument may require. We grant there may be inequalities in a 
protective system, so far as that one interest may have a better 
protection than another. This may be owing, either to the fault 
of those who suffer this inequality, or to that of the legislators in 
not properly adjusting the system. But, though this may be a just 
ground of complaint as a partiality, it is not a positive injustice. 
The principle on which a protective system is required in the 
United States is such, that it can not but be beneficial to all, though 
it be partial in its application. Though it begin with a single in- 
terest, and afford protection to no other, all that that interest gains 
by it, is so much gain to the country, and an injury to no party, 
even though the protective duties be prohibitory. We have else- 
where cited the highest Free-Trade authorities to establish this 
point, though it were superfluous. But when Ricardo and Say 
admit that prohibitory duties can not in the end raise prices, as 
domestic competition will soon bring them to their natural level, 
Free Trade answers itself But we have shown that Protection 
not only does not raise prices of manufactured articles, but that it 
actually reduces them, as a general, rule, very essentially. It mat- 
ters not, therefore, so far as the interest of the country, or of any 
parties in it, is concerned, whether Protection be partial or general. 
All are benefited, and none are positively injured. 

Suppose, then, that some one interest, such as the fabrication 
of cotton goods, in their various forms, has received such an 



PROTECTION NOT RESTRICTION, BUT EMANCIPATION. 183 

amount of protection from the government of the United States, 
that they could be manufactured in this country, against the supe- 
rior skill and cheaper labor of Great Britain. Time was, when 
such protection was absolutely necessary to begin. Behold the 
result. American capital, itself the product of American labor, 
has, to a vast amount, been invested in cotton manufactures, under 
a system of Protection, to employ a vast amount of American 
labor, and to consume a vast amount of American agricultural and 
other products. And consider, that this could never have been 
done, without protection, which is undoubtedly true. But for this 
protection, all this American capital and labor would have been 
shut up under a foreign restrictive system; and it was only by 
such protection, that they have been emancipated from these re- 
strictions, and been productive of such immense saving, and such 
immense wealth to the country, and of such great benefit to all the 
parties concerned. We have shown elsewhere, how greatly cotton 
goods of every description have been cheapened by this system. 
Protection, therefore, so far as this great interest is concerned, and 
so far as all other interests of the country with which it is connected, 
and to which its success and prosperity have brought like results, 
are concerned, has been the means of emancipation to both it and 
them, on an immense scale. Emancipation from what? From a 
foreifrn restrictive system ; from that system of foreign society, and 
of the bondage of foreign labor, against which it would have been 
impossible to contend, without Protection. We see, therefore, that 
such is the position of American capital and American labor, in 
these particulars, in relation to foreign capital and labor, that they 
could not be free without Protection. That this protective system 
has operated as a restriction on foreign injustice, which before held 
American capital and labor in bondage, is not denied. So far an 
American protective system is restrictive ; and so far as this is 
what the Free-Trade economists complain of, their complaint is 
well founded. But to say, that an American protective system is 
restrictive upon and in relation to American interests, when the 
very design, and not less, as above seen, the operation, of that 
system, is to set American interests free, and give them a chance 
to live and prosper, against the oppressive power of foreign interests, 
is absurd. Thus an emancipating, is, by a misnomer, called a 
restrictive system ; and this is one of the great objections alleged 
against it. 

What we have said above of the cotton manufacturing interest, 



184 PROTECTION NOT RESTRICTION, BUT EMANCIPATION. 

is equally applicable to every other American interest, no matter 
what, SO far as Protection has been, or may yet be, necessary, to 
give it a start, and to sustain it, against the rival and oppressing 
power of foreign capital and labor, engaged in the same pursuits. 
Protection, in such cases, does not operate as a restriction on home 
interests, nor as a disadvantage to any ; but it is a benefit to all ; 
it encourages all; draws them out, and gives them a wider and 
more comprehensive scope of operation and of profit. Not a 
single new American interest can be set up by Protection, that is 
not beneficial to some, often to many other interests ; and not one 
that is injurious to any other. The amount of emancipation of 
capital and labor, bears more directly on the interest protected ; 
but it is not confined to that. In helping that, it helps others ; and 
the entire effect, in all its scope, instead of being restrictive, is 
liberative, in relation to home interests, and especially to the capital 
and labor which are vested in them. 

Such is the position of American capital and labor, in relation to 
foreign capital and labor, that it is impossible to protect the former, 
in any particular, or for any object, or in any degree, short of 
positive bounty, so as to be injurious to any other branches of the 
same, or so as not to be in some degree beneficial to all, directly 
or indirectly, by proximate or by remote influences. There is no 
fear, therefore, of extending Protection to too many objects. As 
to the amount, in any given case, and in every case, as it may 
happen to require it, a regard may safely be had to the objects of 
revenue, as well as to those of Protection, so long as it is thought 
best to depend on this mode of raising revenue. The rule of 
graduating Protection is considered in a subsequent chapter. So 
that it BE Protection, it is enough. 

It is said, that a nation must buy, in order to sell, and that this 
multiplication of home interests by Protection, will restrict and 
diminish foreign commerce ; which seems plausible at first sight, 
in the same manner as it is commonly or extensively thought, that 
the protection of one or more of the domestic interests of the 
country, will operate as a restriction on others. But we have 
proved, in another chapter, by a statistical array of well authen- 
ticated facts and tables, running back through our commercial 
history, that, whenever atid in proportion as our public policy has 
approximated toward Free Trade, our carrying trade and foreign 
commerce have declined ; and that, whenever and in proportion 
as we have gone back to a protective system, our carrying trade 



PROTECTION NOT RESTRICTION, BUT EMANCIPATION. 185 

and foreign commerce have been augmented. And these different 
results are clearly proved to have been the legitimate effects of 
these different measures. The answer, therefore, is complete, not 
only as regards domestic interests, which seem more especially to 
occupy a domestic position ; but also as regards the interests of 
foreign commerce. While considering this last point, in its place, 
we have found, that, as a private individual, who, by his industry 
and frugality prospers and grows rich, usually trades more, and 
buys more, so a nation, by like habits, and in a like career, trades 
more and buys more, because it has the means, and can afford it. 
Wants always multiply with growing wealth ; and those wants 
must be satisfied. We have elsewhere shown, that the United 
States uniformly grow rich under a protective system, and poor for 
the want of it; and this, on the principle above recognised, 
accounts for our having a greater amount of foreign commerce 
under the former, than under the latter system of public policy. 

In no sense whatever, therefore, and in regard to no interests 
whatever, does a protective operate as a restrictive system, in the 
United States ; but, on the contrary, it contributes effectively, and 
on an immense scale, to the emancipation of American capital and 
labor from a foreign restrictive system, which has so long held, and 
which will for ever hold, them in bondage, without Protection. 
It neither binds, nor restricts, nor injures any domestic interests ; 
but is a help to all. It is entirely a misnomer, a perversion of 
terms, to call it a restrictive system, as applied to the United States. 
We do not pretend to give law to other nations, nor to say, that it 
does not operate so in other quarters; nor can we consent that 
foreign economists, British or others, should give laws to us, in this 
particular. We have set out, in this work, on the fundamental 
principle, that a system of public economy can not be found, 
equally applicable, even to any two nations ; much less to all; and 
that it is not a science, composed of the same propositions, every- 
where and in all time, as the Free-Trade economists claim for it. 
We find American capital and labor occupying a very different 
position from that of the same things in Europe, and that the same 
treatment applied to both, would not be beneficial to both. A 
system which is good for Great Britain, may be ruinous to the 
United States. We have endeavored to show, in another chapter, 
that Great Britain is the only nation, that is prepared for Free 
Trade, and the United States the last that can afford it ; and the 
reason why we can not afford it, is because of the high price of 



186 PROTECTION NOT RESTRICTION, BUT EMANCIPATION. 

our labor. On a platform of universal Free Trade, the advanced 
position of Great Britain — far advanced of all other nations — in 
her skill, machinery, capital, and means of commerce, would make 
all the world tributary to her ; and on the same platform, this dis- 
tance between her and other nations, in these particulars, instead 
of diminishing, would be for ever increasing, till, as she is now the 
great centre of civilization, she would become the focus of the 
wealth, grandeur, and power of the world. Such a result would 
be inevitable, on these conditions, from the comparative strength 
of her position in these particulars. Nothing but a system of Pro- 
tection can defend us, or any other nation, from her grasping am- 
bition and power. Well may she plead the cause of Free Trade. 
Foreseeing this state of things, she has endowed her writers, and 
instructed the professors of her universities, for a century past, as 
shown in another chapter, to preach Free Trade to the world, that 
she might reap the benefit. 

It will be found, on an examination of Adam Smith's reasoning 
on "freedom of commerce," or Free Trade, that the premises on 
which he started in this argument, and which prompted it, were 
entirely of a different class from those on which the theory of Free 
Trade now usually rests, and on which has finally been erected the 
system which is now adopted by those of his school. Adam Smith 
was right in the ground he originally took ; but, like all bold theo- 
rists, he jumped to general conclusions from isolated facts. Hav- 
ing first begun to sail his bark in a mill-pond, England, he leaped 
the dam, followed the stream to the ocean, and was soon lost in 
the wide sea. It was against the unjust monopolies of certain mu- 
nicipal corporations, known as "the trades" in English law, but 
entirely unknown in the United States, that Adam Smith began to 
plead for Free Trade. These corporations were almost without 
number in Great Britain, counting at one time more than a hundred 
in the city of London, such as the company of goldsmiths, saddlers, 
fishmongers, &c., &c., comprehending all the principal trades, in 
town and country. None could engage in these pursuits, who were 
not members of the companies ; and each of these corporations 
took care not to fill the trade, so that the market should be beyond 
their control. The community were forced to buy of them, at their 
own price. Hence the grievance of these monopolies, and the 
crusade of Adam Smith against them. He also extended his ar- 
gument against the monopolies of foreign commerce, in the hands 
of companies, such as the East India company, the Hudson Bay 



PROTECTION NOT RESTRICTION, BUT EMANCIPATION. 187 

company, the African company, &c. In both these lines of argu- 
ment, his premises justified his conclusion, and he was right. 

But neither he, apparently, nor any of his school, have allowed 
themselves to see the difference between these cases and those 
made by a general protective system of one nation against others, 
in the latter of which there is no monopoly of one citizen or sub- 
ject against others, but where all are permitted, under a common 
law made for all, to engage in what trade or business they please, 
and where competition can enter without limits. To say, that Pro- 
tection is sometimes prohibitory of foreign products, does not make 
out the case of a monopoly, except such, the undoubted right of 
which all nations claim, and are constantly in the habit of exer- 
cising ; and then the monopoly is national, not private. This was 
not the~ ground of objection with Adam Smith. He never once 
made it, nor will it be made by any advocate of Free Trade, un- 
derstandingly. But the objection was and is, that protection of 
domestic industry, arts, and labor, against foreign arts and labor, 
imposed and imposes restrictions on fellow-subjects and fellow-citi- 
zens, when in fact, as every one must see, there was and is no such 
thing, and can not be, so long as there are no corporate privileges 
to exclude others from engaging in the same pursuits at pleasure. 
There can not be a monopoly, where the trade, or pursuit, is equally 
open to all. If a man is excluded for want of capital or skill, or 
for want of both, this may occur under any system, and is the very 
reason w^hy one nation may require protection against another of 
more abundant capital and of superior skill, and why it can not 
engage in certain pursuits, essential to its welfare, without protec- 
tion. But both Ricardo and Say have admitted and maintained, 
that even prohibitory duties can not raise prices, because, where 
there is no domestic monopoly, domestic competition will reduce 
prices to their natural level. 

We say, therefore, that Adam Smith, beginning right, ended 
wrong, by leaping to conclusions, which his premises would not 
justify ; and that all his followers have plunged into the same mis- 
take. They have assumed monopoly, where there is none; and 
restriction where there is none, except as the undoubted right of 
one nation against another. But they assert a domestic restriction, 
which can not be found, and a hardship in the raising of prices to 
consumers, when, in the case of the United States, as we have 
proved elsewhere, the prices are reduced. It does not belong to 



188 PROTECTION NOT RESTRICTION, BUT EMANCIPATION. 

US to prove, that this is the fact in other quarters ; though we think, 
as a general rule, it may be. 

It must be evident to those who are competent to consider the 
case, that restrictions in international commerce, do not of course 
create restrictions in domestic trade. On the contrary, as shown 
above, in the case of the United States, the former are absolutely 
necessary to rescue domestic trade, that is, capital and labor, in all 
their functions, from foreign restrictions of a very grave and serious 
character. 

What, then, do the advocates of Free Trade, in the United 
States, ask for ? Precisely the same thing which Protectionists 
demand, to wit, the free and unrestrained use of American capital 
and labor. The only difference is about the mode of attaining to 
that end. We have shown here, and in other parts of this work, 
that the only way is by a protective system. It is a misnomer, 
therefore, to call it a restrictive system, when there is no such thing 
in it. The design and tendency of an American protective system, 
is not to embarrass, but to disembarrass,' American capital and la- 
bor ; to rescue and shield them from foreign oppression ; to encour- 
age them ; to bring them out ; to open the way for their most profit- 
able employment ; and to make them entirely free. 



MONEY. 1 89 



CHAPTER XIII. 

MONEY. 

Barter, its Nature. — Origin of the Name, " Precious Metals." — How Gold and Silver came 
to be used as Money. — Gold not used as Money in all Parts of the World. — Relative 
Proportions of the Precious Metals employed as Money and for other Purposes. — Foun- 
dation of the Value of Gold and Silver, when used as Money.— Turgot, Say, M'Culloch, 
and others, on this Point. — The Foundation of the Value of Money lies in the Demand 
of the Precious Metals for other Uses. — It is a Foundation in Nature, not the Result of 
Convention. — Definition and Functions of Money. 

Barter, or the exchange of one commodity, unrepresented, for 
another, is the natural, and was the original mode of trade. That 
is, one man, being in possession of a thing, no matter what, which 
another wants more than he does ; and the other being in posses- 
sion of a thing, no matter what, which the first wants more than the 
second does ; they agree to exchange, and do exchange, on such 
terms as may be arranged between them. This is barter. It is 
true, that this definition includes money, or its material, as a com- 
modity. It is impossible to give a definition of barter, without a 
comprehension of this, as a possible result. But money, with its 
present attributes and functions, was not originally in use, and is 
the result of social improvement, or of the convenience and neces- 
sities of society. 

In process of time, of which the memory of man and history give 
no advice, certain metals, commonly called gold and silver, having 
been discovered, and found to possess excellent and unrivalled 
qualities for certain uses, and for ornament, became "precious." 
This may be supposed to be the origin of the name, ^^ precious 
metals." For certain purposes of use and ornament, other things 
have been held much more valuable even than gold and silver, and 
for which ten, twenty, a hundred, and even a thousand to one, in 
weight, of the " precious metals" have been and are given, as an 
equivalent. Nevertheless, partly on account of their scarcity, and 
especially on account of their adaptation to so many useful and or- 
namental purposes, no other substances, original, or however formed, 
have ever acquired the position of being held so universally "pre- 
cious," as gold and silver. 

And it is to be observed, that this view does not bring us to their 



190 MONEY. 

position and use as money. Gold and silver are not valuable, sim- 
ply because they are money. This was not the original ground of 
their being held in such high esteem ; but they have been adopted, 
and have obtained universal consent, to be used as money, or a 
common medium of exchange, because of their value for other 
uses, and because they are always in demand for such a vast vari- 
ety of appropriations, other than money. Money is but one of their 
uses, later in the order of things ; and it is only a fraction of their 
value that is created by their use as money, in the same manner 
as anything else is increased in value, in proportion as its uses are 
multiplied. The real foundation of the value of gold and silver, 
may be said to be, was in fact, prior to their having been viewed 
in the light of money, and apj^ropriated to that use ; and the cause 
of their being thus appropriated, was doubtless the discovery, by 
experience and observation, of their unrivalled qualities for other 
uses and in other applications. Time and immemorial usage, there- 
fore, have assigned to them the functions of money, apparently for 
ever, without the remotest probability of change. Nevertheless, 
this was not an accident, was not arbitrary; but there wefe sub- 
stantial, fundamental reasons, of the nature of value, lying some- 
where back, beyond. Gold and silver could not even now retain 
their value as money, but for the foundation on which they fall back 
and rest, as being greatly valuable for an almost infinite variety of 
other purposes, which are always ready to take up and absorb 
them, whenever they can be spared from trade, and which, as a 
part of trade, is constantly being done ; and as a part of trade also, 
they are as constantly going back into the forms or into the uses 
of money, though not in so great amount. The natural current 
from the bowels of the earth, is to the other uses of gold and sil- 
ver ; and only so much of them is arrested, on the passage, for 
money, as the necessities of trade require. It is only in distress, 
that people will surrender their plate, trinkets, or any other '* pre- 
cious" things, composed of gold or silver, for money. 

Although the high value of gold and silver appears to have been 
appreciated, in the earliest stages of society of which we have any 
account, the world was slow in adopting them to discharge the 
functions of money, or of a common currency, as they now do, 
throughout the civilized world ; and even down to this day, Jacobs* 
says: "Gold has been rarely used in Asia, as money, either 

• William Jacobs, Esq., F.R.S., "An Inquiry into the Production and Con- 
sumption of the Precious Metals," 2 vols., London, 1831. 



MONET. 191 

coined or uncoined." He also says : " Silver is said to have been 
first coined in Rome, in the year of its building 485, or 2G6 years 
before our era [Christian]. The first gold coin of Rome follovi^ed 
that of silver, after an interval of 62 years." 

When the Hebrew nation became rich, they displayed, under 
Solomon, great accumulations of gold and silver. But silver only 
was used in commercial exchanges ; gold for ornamental purposes, 
as also silver. Solomon used gold profusely in decorating the 
royal residence, and the temple. 

In the empire of Japan, to this day, gold is apparently used as 
plentifully as in the days of Solomon, according to Jacobs, for the 
decoration of public and other buildings, and is prodigally laid on 
their furniture; but it is not used as money, either there, or in 
China, comprehending, in this particular, other parts of the East. 

All parts of the world have produced the precious metals, more 
or less ; and when the richest sources have been discovered, they 
seem always to have been worked, till so much exhausted as not 
to pay cost. They once abounded in different parts of the Roman 
empire. All know somewhat of the mines of Mexico and South 
America. At the present time, Russia is producing gold in con- 
siderable abundance, reported at an average of $12,000,000 an- 
nually for six years previous to 1846, and $17,000,000 for that 
year. 

It would be impossible even to conjecture, with any tolerable 
reliance, the number of uses to which gold and silver are applied, 
other than of money. Jacobs says: "One of the greatest causes 
of the consumption of gold, is the use of it in smaller personal 
ornaments, and in the variety of trinkets, whose basis is gold. It 
is supposed that, in both England and France, the quantity of the 
precious metals applied to these minor purposes, by far exceed 
that which is converted into larger objects. Silver teaspoons in 
England, may be counted by millions, perhaps by hundreds of 
millions." Jacobs estimates that fths of the silver, brought to 
Europe from 1700 to 1810, was manufactured in similar articles 
of household furniture. Who can count the gold in watches, 
finger-rings, bracelets, and other ornaments of the head, neck, 
bosom, and person. In the courts of Europe, some men might be 
said to be encumbered with the mere weight of gold displayed on 
their persons. The gold and silver absorbed by churches, found 
upon and around the altars, have not been small in amount, and 
are always deemed the richest prey of spoilers. 



192 MONEY. 

Adam Smith seems to have thought, that the gold and silver, 
used up by manufacturers, in his time, were equal to the whole 
annual product. He rates the gold and silver plating and gilding 
at Birmingham, in that time, at .£50,000 a year. Jacobs says: 
" A degree of destruction of gold and silver, which was scarcely 
felt in the ancient world, has, in modern times, been steadily and 
rapidly advancing, and must at length produce a sensible effect on 
the value of all commodities." He also says, that, when America 
was discovered, Europe produced the precious metals as fast as it 
consumed them; that, in 63 years after that event, 50 per cent, 
was added to the general stock ; and 150 per cent, from 1599 to 
1699. The amount he allows for Europe, at the discovery of 
America, is .£35,000,000; and in 1599, £155,000,000. One 
hundred and fifty per cent, on this, for the next hundred years, 
would raise the stock in Europe, for 1699, to £487,500,000, 
which has been increasing ever since, though not very sensibly for 
the last half century, till the gold of Russia seems to have revived 
the impetus. The highest amount of gold and silver coin which 
Jacobs allows for Europe and America, is .£380,000,000, for 
1809, since which it has declined, at the rate of £40,000,000 in 
twenty years, which is doubtless owing, partly to the decreased 
product of the mines, partly to the use of paper-money, and partly 
to the great demand for these metals in other applications, and to 
the multiplication of those uses. The increasing product of the 
Russian gold may be regarded as opportune for the commercial 
world, to sustain the body of the currency in that material, which 
is most convenient of the two. 

Some economists pretend, that the amount of currency is not of 
material importance, as the prices of commodities are regulated 
accordingly. It is at least desirable that there should not be 
sudden and great fluctuations in this amount, as such changes 
affect the value of the income of different classes of society very 
unequally. For example, when the great abundance of the pre- 
cious metals derived from the American mines had raised the 
general price of the necessaries and comforts of life as 4 to 1 of 
what they were before, it was a hard case for nonproducers of such 
commodities, whose position, though occupied in other industrial 
and useful pursuits, obliged them to live on the same amount of 
money as before. 

The relative proportion of the precious metals converted into 
money, as compared with that absorbed by all other uses, seems to 



THE FOUNDATION OF THE VALUE OF MONEY. 193 

have increased, from the early ages, with the growing demands of 
commerce. Jacobs says : *' Taking the amount of coined money 
at thirty milhons [sterHng], we should calculate the remainder of 
the two metals [in England] at sixty millions," or two of the latter 
to one of the former. He also applies this rule to France. M'Cul- 
loch, in an article in Brande's Dictionary, says the coin of Great 
Britain "is at least sixty millions." But for Europe and America 
together, Jacobs makes the proportion three for money to four for 
other uses. In another place, however, he allows that the value 
of "three or four" is found in England, in other forms, to one of 
money ; and that, from 1810 to 1830, the other uses, throughout 
the world, absorbed more than what came from the mines. He 
also says : " Current coin in Europe and America diminished, be- 
tween 1809 and 1829, from ^380,000,000 to ^320,000,000." 
It may, perhaps, be concluded, that the proportion now existing 
in other forms, in Europe and America, is as three to one of money. 
But the comparative amount of the precious metals employed in 
the world as money, is an accident of history, arising from the ex- 
tent and demands of commerce, since they have been so appropri- 
ated ; and does not at all affect the question of the foundation of 
their value in the form of money. 

Assuming that nothing is money but gold and silver, or that 
which will command them at the will of the holder, it may be re- 
marked, that the universal credit of these substances, when used 
as money, must have a foundation. That foundation is usually 
called intrinsic value. But a little reflection will show that the 
value, thus asserted, lies farther back than the use of these metals 
as money, not denying that this use is a fraction of their value. 
But how came they to be used as money? Davanzati, an Italian 
economist of high repute, says ; " Gold and silver, being found 
to be of no use in supporting human life, have been adopted," &c., 
that is, appropriated to the use of money. This, we should think 
too puerile to be noticed, except for the gravity with which it has 
been cited by others. M. Turgot answers this question : " By 
the nature and force of things." But this answer, as must be 
seen, has no more point in it than the surface and materials of cre- 
ation, inasmuch as it has all this range. Others answer : By rea- 
son of their qualities. This is not denied, so far as those qualities 
determine their intrinsic value, which brings us back to where we 
started from. But it is said, they mean the adaptation of their 
qualities to this specific use ; which has some reason in it, but 
13 



194 THE FOUNDATION OF THE VALUE OF MONEY. 

more against it. The very authorities who give this reason, be- 
cause, forsooth, they must give some reason, such as M'Culloch, 
overturn it by starting objections, and proving the great incon- 
venience and expense of these qualities, in such an appropriation 
of these substances. 

The truth is, gold and silver w^ere proved to be valuable, highly 
so, and always in demand, before they were used as money. 
They were found to be remarkable for their beauty and utility, and to 
excel all other substances for the number of uses in which they were 
held in high esteem, no matter whether for utility or fancy, as 
both these ends impart value or command price ; and the longer 
and better that they have been known, tried, and compared, so 
much more stern and abiding has been the proof of their excellence, 
and so much greater the number of uses to which they have been 
appropriated, and for which they have been in request. These are 
facts which run back through all history, and are without contra- 
diction ; and the growth of history on this point, as to both materials 
and time, only tends to verify them. Gradually, in the course of 
time, and by the exigencies of society, they came to be appropri- 
ated, by general consent, to the uses of money, till at last that con- 
sent became universal in the civilized world. This appropriation, 
therefore, was ulterior and consequent to the ascertainment of the 
many useful and admirable qualities of these metals for other pur- 
poses ; without which, there is no probability that they would have 
been employed as money. 

Turgot says, " The precious metals became universally money, 
not in consequence of any arbkrary agreement among men, or of 
the intervention of any law, hut by the nature and force of things P 
That it was "not in consequence of any arbitrary agreement," is 
well said, though M. Say seems to think otherwise. It is no less 
true that law can not make money, or force credit into anything, 
to make it pass for money. Our continental money, the French 
assignats, and other attempts of the kind, with which history 
abounds, are in point. But Turgot, like every thinking man, felt 
the necessity of finding, at least of asserting, the foundation of the 
value of money. And what is it ? *' The nature and force of 
things !" But " the nature and force of things" is so indefinite, so 
obscure, and so mystical, that one is so far from being enlightened 
by such a definition, as to be thrust into greater darkness. Instead 
of having the foundation pointed out, one is intro-duced into the 



THE FOUNDATION OF THE VALUE OF MONEY. 195 

wide creation, to find it as he can. No doubt it is somewhere in 
this field. 

M. Say says: "Money is indebted for its currency, not to the 
authority of government, but to its being a commodity bearing a 
peculiar and intrinsic value." The use of the word " peculiar" 
here, is a sufficient indication that M. Say was not prepared to 
go any farther ; that it was a mere refuge ; for, in such a con- 
nexion, on such a topic, it is obscure and mysterious, scarcely, if 
at all, more explicit and definite than Turgot's " nature and force 
of things." And yet it is a subject, a point, on which we can not 
afford to be left in the dark. It is the foundation of a monetary 
system that we are now in search of; which is one of the most 
important branches of public economy. M. Say also observes: 
*'If they [gold and silver] were never used in plate or jewellery, 
money would grow cheaper," By " plate and jewellery" here, 
he evidently intends to comprehend all the uses of these metals, 
other than that of money ; for he adds : *' The employment of the 
precious metals in manufactures, makes them scarcer and dearer 
as money." M. Say actually stood here, with his foot on the very 
foundation of the value of money, recognised it in terms, and yet 
he did not seem to know he was there. For he does not even 
raise the question whether, but takes for granted that gold and sil- 
ver would have been used as money, if they had not been appro- 
priated to these other objects. It is marvellous that he should say, 
" their employment in manufactures makes them scarcer and dearer 
as money," when in fact these other uses constitute the only foun- 
dation of their value and use as money. It is true, indeed, that 
these other uses make them " scarcer," and " dearer." But M. 
Say takes for granted they would have been used as money, 
independent of these other uses. 

M'Culloch says : " The union of the different qualities of the 
comparative steadiness of value, divisibility, durability, facility of 
transportation, and perfect sameness, in the precious metals, doubt- 
less formed the irresistible reason that has induced every civilized 
community to employ them as money." Here, again, is not the 
least approximation to the true question, except as it is assumed. 
What is required is, to have it solved. No doubt " steadiness of 
value" was a reason, and the reason. But how came it with that 
" steadiness of value" ? The other four consecutive reasons are 
comprehended in the first, and compose it, as to the money charac- 
ter of gold and silver. These qualities, however, can be found in 



196 THE FOUNDATION OF THE VALUE OF MONEY. 

many other things. The qualities of gold and silver, such as they 
are, are very serious objections to their use as money, so much so 
that they are kept in deposite, as much as possible, and the great 
bulk of trade and commerce is carried on by a substitute, to wit, 
paper. So far from having a " facility of transportation," it is very 
inconvenient and expensive. M'Culloch himself says, on the third 
page following the above-cited passage, "it occasions a very heavy 
expense." Think of the expense of bringing twenty-five millions 
of dollars of specie from Europe to the United States, in 1846 and 
1847, as a balance for breadstuffs required in Europe by famine. 
The costs of insurance, brokerage, freight, loss of interest in the 
meantime, &c., could not be covered for less than 3^ per cent., 
which, as will be seen, amounts to $875,000. And as this impor- 
tation of specie into the United States was forced by an extraordi- 
nary and providential event, it is, perhaps, safe to consider it as out 
of place, and it may have to go back again. A boldness of impor- 
tation, based on this, will naturally force it back, to cost $875,000 
more ; or in all, by these two moves, $1,750,000. Such, also, is 
the effect of removing specie, in large amounts, from one part of 
the country to another. Any one can see, that paper is a much 
more convenient, and much less expensive medium, which is always 
resorted to, when it has specie as a basis ; but for want of it, specie 
itself must travel. The transactions of six of the New York banks, 
amounting to $60,000,000, in ten days, without employing over 
$200,000 of specie, noticed in Chapter XVI., show how utterly 
impossible it would have been to do more than a small fraction of 
that business, in the same time, with specie. The qualities of gold 
and silver, therefore,' instead of being a reason for their use as 
money, is one of their greatest objections — certainly a great one, 
and a very expensive inconvenience. Besides the inconvenience 
and cost of large transfers of specie, from one nation to another, 
and from one point of the same country to another, it would be next 
to impossible to transact the ordinary small trade of a country with 
specie, between points requiring remittances ; and while bank paper 
is convertible, almost everybody prefers it to specie, and employs 
it, except for small change. Gold and silver are burdensome in 
the purse, in the portmanteau, and in the trunk, besides being a 
subject of anxiety, when one has charge of them, at home, or trav- 
elling. It would be absurd to say, that people object to have them, 
as owners, for they are of recognised value ; but most people do 
not like to have them, as keepers, on account of the inconvenience, 



THE FOUNDATION OF THE VALUE OF MONEY. 197 

risk, and cost of removal. Their qualities are a serious evil for the 
purposes of money. How absurd, then, to assume, that they are 
devoted to this use, on account of their qualities, except so far as 
they are adapted to other uses, which, as a foundation, constitute 
their adaptation to this, and thus overcome the objections to their 
inconvenience. Their adaptation to other uses, and their values 
in those uses, are undoubtedly the true secret of the founda- 
tion of their value as money. They began to be used, and can 
only continue to be used, as money, on that account. The evils 
of their qualities as money, could not be tolerated, would cause 
them to be repudiated, but for this ; but on account of this, these 
evils are submitted to ; they are not a recommendation. The rec- 
ommendation is farther back, lies deeper, and overcomes these ob- 
jections ; and not only overcomes them, but makes them light and 
preferable. The very name, distinctive, of these metals, " precious," 
comes not from their use as money ; but from their other numerous 
and important uses, constituting the foundation of their value. This 
designation of ^^iirecious metals," is very significant. It did not 
come by chance ; but is founded on a substantial aggregate value^ 
which never has failed, and never can fail, in any probability; be- 
cause the uses of gold and silver are constantly multiplying. While 
one is superseded, many are added. Nobody apprehends the fail- 
ure of their value. The experience of all nations, in all time, has 
established their character as "precious," and there never has been 
manifested a symptom of the giving way of this faith. It is only 
confirmed by time and events. Notwithstanding, therefore, all the 
inconveniences of these metals, on account of their qualities, when 
employed as money, they will no doubt continue to fulfil this des- 
tiny, on account of the foundation of their value in' other uses. They 
who possess them, will ever know, can never doubt, that they hold 
in their hands the best possible pledge of value. 

It is proper, here, to remark, that the inconveniences of gold and 
silver, as a currency, are increased by time, as civilization advances, 
as commerce is extended and increased, and as, by this means, the 
necessity of effecting commercial exchanges with the greatest pos- 
sible expedition, and in great amounts, is augmented. For this and 
other reasons, many eminent economists and statesmen have ex- 
hausted their wits to find a substitute. Even Ricardo appears 
seriously to have believed, that the British government might found 
a currency on its credit. He advocated it, if we are rightly in- 
formed, in the very face of the depreciation of the bank of England 



198 THE FOUNDATION OF THE VALUE OF MONEY. 

paper, during its suspension of cash payments, from 1797 to 1822. 
He appears to have based his theory on the fact, that the deprecia- 
tion was no more ; whereas, we think, he should have come to the 
opposite conclusion, from the fact that it depreciated so much. That 
credit is itself a currency, in one sense, and to a great extent, is 
undoubtedly true; but it must have a foundation. It is this very 
foundation which we are now inquiring for, to wit, the foundation 
of the value or credit of gold and silver, as money, as the medium 
of trade. All seem to admit, that it is not in its character as mon- 
ey ; for who of the economists, it may be asked, has ever yet got 
farther than Turgot in this investigation, who laid this foundation 
" in the nature and force of things" ? Clearly that can not be sat- 
isfactory. 

And yet a knowledge of the foundation of the value of money is 
not less important for an intelligent view of the whole subject, than 
is a knowledge of the foundation of anything else that can be named, 
to a right view of it. Branches of truth, in such a practical mat- 
ter, may, doubtless, be seen, and correctly stated, without this knowl- 
edge ; but no philosopher should be satisfied, till he has got to the 
bottom of his subject ; and he is liable to error, if he does not 
find it. 

" The sole reason," says M. Say, " why a man elects to receive 
the coin, in preference to every other article, is, because he has 
learnt from experience, that it is preferred by those, whose products 
he has occasion to purchase. Crown-pieces derive their circulation 
as money from no other authority than this spontaneous preference. 
Custom^ therefore, [originating in an accident,] designates the spe- 
cific product that shall pass exclusively as money. The choice 
of the material is of no great importance, whether it be gold 
or silver, leather or paper. . . The value of gold and silver is 
arbitrary, and is established by a kind of mutual accord in every 
act of trade." Is not this very astonishing? It will be observed, 
that we do not arraign the alleged force of custom in the case 
which is always a blind leader ; but the question is, what was 
the original foundation of this custom? Custom, certainly, is 
a better reason for an ignorant man, than for a philosopher, who 
professes to give, not only the reason why money has credit, but 
why it originally obtained credit, as a common medium, and why 
it has maintained it, from time immemorial, with all the world, 
without experiencing the least possible diminution or disturbance? 
There must have been a time when this use of gold and silver, as 



THE FOUNDATION OF THE VALUE OF MONEY. 199 

money, had not so much the power of custom ; and there never 
was a time, when, as a mere custom, it would not have been dis- 
turbed, if it had not a more substantial basis ; if, indeed, it had not 
a foundation in reason, in philosophy, in every consideration, that 
would stand the scrutiny of all men and all minds addicted to in- 
quiry, so as to baffle every possible effort to impair that credit. 
Custom is not, can not be, a reason for such a fact. There is not, 
perhaps, a subject within the scope of human investigation, the true 
basis of which, for the practical purposes of life, is more important 
to be understood, than that of money, or the knowledge of which 
is more essential to a true theory of public economy, so far as it 
relates to the currency. Most truly did M. Say remark : " The 
first principles of political economy are as yet but little known. 
Ingenious systems and reasonings have been built upon hollow 
foundations." Here is not only a " first," but a fundamental 
"principle," entirely unknown to himself; and his own "ingenious 
reasoning," on this vital and fundamental question, is not "built 
upon a hollow foundation ;" but it has no foundation at all. 

M. Say observes truly : " To enable it [money] to execute its 
functions, it must, of necessity, be possessed of inherent and pos- 
itive value." But, surely, its value must lie somewhere else than 
in its character as money ; or, in other words, something else must 
have made this gold eagle, and this silver dollar valuable. Time 
was, when they were not money ; now they are ; there must have 
been some other reason for their adoption, than that money was 
wanted. Say, these metals are scarce ; there are many things 
more so. Say, they are convenient for this use, on account of their 
qualities ; there are other substances not ill and some much better 
adapted, in these attributes, for such an appropriation ; and allow- 
ing, that these useful qualities, added to their scarcity, impart a 
substantial value to gold and silver as money ; which is not denied ; 
still the value for which they are credited, relative to that of other 
commodities most necessary to man, is in great, prodigious dispro- 
portion, independent of other considerations. Say, that this dis- 
proportion is convenient to all parties, to all the world. That may 
be, doubtless is, true. It is, then, an arbitrary value — a fraud ! 
The world has cheated itself, and reckons it a good bargain ! 

It is evident, self-evident, that gold and silver, as money, must 
have had a value to start with, and as a reason for being able to 
start. This is the point, and all that is claimed. To suppose that 
the world has been swindled, or swindled itself, into the belief, 



200 THE FOUNDATION OF THE VALUE OF MONEY. 

that money has a value, which, after all, is factitious ; and that it 
should be satisfied with this persuasion, on the principle that it is 
a convenient delusion, is not more absurd than contrary to M. Say's 
own doctrine, when he says, " a system of swindling can never be 
long lived, and must infallibly in the end produce much more loss 
than profit." It is not easy to believe, that the world has been 
thus cheated, and that the credit of its circulating medium does not 
rest on a basis entirely independent of itself. It is the very nature 
of credit to have a basis. To say that intrinsic value is the basis, 
is precisely what we maintain. Intrinsic value for what? It is 
not the idea or function of money, that constitutes intrinsic value ; 
but it is that which qualifies for the function ; and the qualifying 
power lies back of money itself, is underneath it, is its foundation. 
But why adopt an absurdity without cause? Why hold debate 
here, when the numerous and important values of gold and silver, 
for other uses, are so palpable, quite enough to recommend them 
for the offices of money, and quite sufficient to sustain them in the 
discharge of these functions ? In this light, society is safe, and 
the good sense of mankind is vindicated, in adopting the "precious 
metals" as a common currency. It would be most unpleasant to be 
obhged to believe that money is a fraud — or even that the use of 
it is a self-imposed deception. 

But it is not, perhaps, very strange that an economist, who, like 
M. Say, holds that the value of paper money does not depend 
upon its being convertible into specie on demand, should also 
maintain that the esteem in which gold and silver are held, as 
money, is arbitrary — the effect of custom. 

Without doubt, gold and silver employed as money, constitute 
one of the values of these metals, and that not unimportant; but 
the foundation on which they started as money, the causes which 
summoned them to this position, to these important functions of 
society, and of the commercial world, will be found only in values 
of an older date ; and the causes which still sustain their credit as 
money, will also be found in the same old values, and in a multi- 
tude of others since added, and continually augmenting, as the 
uses to which these metals are applied, other than that of money, 
are multiplied in the progress of time, and in the advances of 
civilization. It was never an accident, nor a sum or concatenation 
of accidents ; it was never an arbitrary fit, nor an arbitrary law of 
society, that lifted gold and silver into the position, and installed 
them in the functions of money ; it was not custom ; it was not 



THE FOUNDATION OF THE VALUE OF MONEY. 201 

even the necessity of a common medium of trade that selected them 
for this duty, though that necessity was urgent ; but it was a sub- 
stantial value imparted to them by time and events, destined never 
to be diminished, but always to increase; it was "the nature and 
force," not " of things" in general, as Turgot taught, but of these 
very things in particular ; it was their own position, their own force 
and nature, their own value, independent of and prior to that of 
money, that made them money. As a law of society, which grew 
up with society, it could no more be resisted than a law of nature. 
It was not a choice which men made ; but a necessity into which 
they were forced ; and not a necessity to have this or an alternative 
at their own will ; but to have this, and nothing else. There was 
no more uncertainty hanging over the predestined use of gold and 
silver as money, than over the course of the heavenly bodies. The 
law in one case is as forcible as that in the other ; and both are 
ascertainable and definite. One is the attraction of gravitation ; the 
other the intrinsic value of gold and silver for other uses. 

If we wish to ascertain the additional value which gold and 
silver have acquired in their use as money, we know of but one 
rule, which, though it may not be accurate, is worth something. 
In China, Japan, and some other portions of the Eastern world, 
goldJs not used as a currency, but silver only. Take, then, the 
relative value of these metals in Europe and America, where both 
are used as money, and in those quarters where silver only is thus 
employed, and the difference may perhaps, be assumed as the pro- 
portion of value which they have acquired by their use as money. 
In Europe and America, the value of gold is to that of silver as 
15 to 1, with a small additional fraction in favor of the former. 
In China, the value of gold is quoted, by some authorities, as 12 
to 1 of silver ; by others as low as 10 of the former to 1 of the 
latter. In Japan, the value of gold is cited by some as 9 to 1, by 
others as 8 to 1 of silver. If the medium difference in these 
quarters be assumed as 10 to 1, then the value added to these 
metals by their use as money, is equal to one half of their value 
for all other uses. It ought to be by much the greatest value, as 
compared with that imparted to gold and silver by any other single 
use, because it is by far the most important. 

Money may be defined as the common medium of trade, or oj 
commercial exchanges. Or it may be called the standard medium 
of trade. 



202 DEFINITION AND FUNCTIONS OF MONEY. 

We have purposely and scrupulously excluded from this def- 
inition all other ideas, which, by various authorities, have been 
put into the definition of money, particularly such as its being a 
measure of value, which, at first sight, would be received by almost 
all persons as a correct and necessary part of the definition. 

A man on 'change buys stock of one person, at 95 per cent., and 
turning on his heel, sells it to another at 951. Which is the 
measure of value, since both can not be? The buyer who buys 
to sell, for the sake of profit, always buys at one price, and sells at 
another and higher if he can. In all exchanges, prices are con- 
tinually fluctuating. Which is the measure of value? These 
examples are perhaps enough to show, that the definition of money 
as being the measure of value, or when this is made a part of the 
definition, leads to an absurdity. 

We think M. Say has clearly proved that money is not the 
measure of value, by the simple suggestion, that measure supposes 
an invariable rule, as for example, in measures of capacity, of 
superficies, of length, and of weight. Invariability is so important, 
that the law makes it a fraud and criminal offence to use false 
measures in trade. But prices are constantly fluctuating. Money 
expresses prices, and effectuates exchanges ; but it does not meas- 
ure prices. Its functions cease, when it has expressed them, and 
effectuated the trade. It can go no farther. The measure of 
value is the agreement of parties as to price, in any particular 
transaction ; and for public purposes of the market, the prices 
current are the nearest measures that can be found. If persons 
would learn to distinguish between the expressioji and the measure 
of values, they would find themselves at the end of this question. 
The agreement of parties determines^ and money expresses values. 
The agreement is the measure of value, as between them, and it is 
expressed in the established denominations of money. So in all 
cases of actual exchanges. So in prices current of the market. 
The sole functions of money, as such, are to express values, and 
to effectuate exchanges as a quid pro quo. 

We define money, therefore, as the common medium of trade, and 
find in it two simple, but important functions, one to express values, 
and the other to consummate commercial exchanges, by being 
given on one side, and accepted on the other, as the consideration 
thus agreed upon. It is a medium, as the ijistrumeni; it is common, 
because the world has so ordained. 



MONEY. 203 



CHAPTER XIV. 

MONEY. 

The Distinction between Money as a Subject and as the Instrument of Trade. — Review 
of the Doctrine of Adam Smith and others on the Relative Position of Money and of the 
Commodities given for it. — Adam Smith versus Adam Smith. — Price the Attribute of 
Commodities, not of the Money given for them, — Smith and Others on this Point — Error 
and Confusion of their Doctrine. — Weight the Measure of Money. — Effect of the Dis- 
covery of America on Prices. — Professor Twiss' " View of the Progress of Political 
Economy, since the 16th Century." — Mr. Twiss meets the Point, and puts all at Stake. — 
Examination of his Position. 

Having defined money, determined what is the foundation of 
its value, and ascertained its functions, it is now proposed to mark 
the distinction between money as a subject and money as the in 
strument of trade, then to follow out its results. This distinction is 
one of great importance, not simply because it is a fact, connected 
with a very important subject, but more especially because the fact 
itself is entided to more influence on the question between Free 
Trade and Protection than any other, perhaps, that could be named. 
It is, indeed, in our opinion, of itself alone fully adequate to decide 
that question. Whether this be a reason that has induced the 
Free-Trade economists to keep this distinction out of view, or 
whether they have fallen into their great error because they did not 
discern it, we do not undertake to decide. It is true that it has 
been recognised, incidentally, by Adam Smith, and by others of 
his school, as it was impossible, certainly not easy, to avoid it ; but, 
whenever the proper place for its influence turns up, it is carefully 
kept out of sight, all is silence, except, in one recent and notable 
instance, Mr. Twiss, who faces the principle, and denies its ap- 
plication, by forcing upon it a misnomer, as we shall presently see. 

We proceed to the distinction. The Free-Trade economists, 
Adam Smith and his school, say, that money is a commodity, and 
that it occupies the same position in trade as other commodities. 
We grant, that it is a commodity, and that as a subject of trade, it 
occupies, as they say, the same position as other commodities. 
But we deny, that it discharges the functions of money, and hold 
that it is merely passive, when it is the subject of trade. Gold 
and silver, in passing from the mines to market, bullion in the 



204 DIFFERENCE BETWEEN MONEY AS THE SUBJECT, 

market, and all manufactured articles which are composed in whole 
or in part of the precious metals, are subjects of trade. The 
same may be said of coin, bank-notes, and negotiable paper of 
every kind, when bought and sold. Bankers and money-brokers 
trade exclusively in money, and money in their hands, and in 
whatever form, coming or going, is always a subject of trade. 
The precious metals, in bullion or in coin, passing through the 
hands of brokers, from one country to another, are subjects of 
trade, while in the hands of those dealers, though they may be ai 
the same time discharging the functions of money between debtor 
and creditor, who employ bankers and brokers as agents of remit- 
tance. All notes discounted at bank, are subjects of trade, in the 
transaction, both to the lender and to the borrower. Bills of ex- 
change, bonds and mortgages transferred, and many other descrip- 
tions of credit, for which a consideration is paid, are subjects of 
trade. All who borrow credit for a consideration, buy it. It is a 
subject of trade in the transaction. Gold and silver, in all other 
forms than that of money, are subjects of trade. So far as these 
and many other forms and conditions of money and of credit go, 
and so far as the precious metals are devoted to other objects than 
money, as subjects of trade, we agree with the Free-Trade econ 
omists, that they occupy the same position as other and all other 
commodities exchanged in trade. 

But, it must be observed, that money, in its own proper func- 
tions, as such, has had nothing to do with all this, except so far as 
the considerations rendered in these transactions are concerned, 
as for example, the discount and interest of a note. They are 
merely the preparatory stages, through which money passes, the 
platform on which it is tossed about, in a merely passive state, as a 
subject of trade, till it reaches the great field of the commercial 
world, where it is destined and designed actively to discharge the 
appropriate functions of money. This is a field, before which the 
Free-Trade economists have held up a screen. Let us go behind 
it, and see how money operates there, in distinction from the man- 
ner in which it is operated upon as a subject of trade, before it 
gets there. 

A consideration of the difference of destination of money, and of 
the things for which it is exchanged, as the medium of trade in this 
field, will cast light on this point. The destination of money here, 
is for an endless round of duty, in the discharge of the same func- 
tions ; whereas the destination of the subjects of its agency in trade. 



/IND AS THE INSTRUMENT OF TRADE. 205 

is either for consumption, or for a fixture in the disposition of per- 
manent capital, so called, but yet often perishable. Money is 
employed as the instrument to carry them on to their respective 
destinations, where they must soon arrive, perhaps by the first 
transaction ; but whether by one or more, money is the agent, and 
they are the passive subjects. But the functions. of money in this 
field, never cease ; it will never have done its work ; its destina- 
tion is perpetual employment in the same offices ; and while the 
things on which it operates, are constantly passing away by con- 
sumption, or arriving at their final destination as fixtures, by the 
agency of money, money itself is constantly returning to its duty 
in moving on other commodities, in endless succession, to their 
destinations. Money, in this field, is the moving power, without 
which nothing else would move, so far as trade is concerned, except 
in the way of barter, which, properly does not belong to civilization. 
And yet Adam Smith, Say, Ricardo, M'Culloch, and others of 
that ilk, tell us, that money and a piece of calico are, commercially 
considered, the same thing, and occupy the same position, in a 
commercial transaction, when one is exchanged for the other ; and 
they tell us, that it is no matter, whether a nation parts with one or 
the other, so that trade goes on. Unfortunately for a nation, and 
fortunately for the truth, the absurdity comes to light, when the 
money is all gone and trade will no longer go. 

We submit, then, whether the distinction between money as a 
subject and as the instrument of trade, is not clearly made out, as 
definite, substantial, and necessarily influential as to the matters in 
question. 

When and wherever there is a want of money, trade comes to a 
halt. The interest of every party, therefore, a man or a nation, 
concerned in trade, is to take care not to be out of money, for it is 
his " tools of trade." And how does such a party get out of 
money, if it had any ? It can only be by buying more than is 
sold of other commodities, which are prized and moved by money, 
and by being obliged to settle balances with cash. When the 
trade of a party comes to this, and the store of cash is exhausted, 
trade must slop, barter only excepted, which is the same as stop- 
ping, because it is a mode of trade which can not be revived, and 
which, if it could, can not now be employed to any profitable 
extent. 

It is by entirely overlooking this distinction, that the advocates 
of Free Trade commit their fatal error. They hold that money is 



206 DIFFERENCE BETWEEN MONEY AS THE SUBJECT, 

a commodity, and that it is exchanged in trade as such ; and that 
consequently, the more of trade, the better, whether money goes 
or comes ; or whether all goes, and none comes. 

But, as above shown, it is not true, when gold and silver are 
parted with, in discharge of the functions of money, that they 
occupy the same position, as the commodities for which they are 
given; much less do they discharge the same functions. Strictly 
speaking, the commodities thus operated upon by money, discharge 
no functions at all, in the transaction that is going on, but are 
merely passive. Neither the world, or any part of it, has ever con- 
sented to take these other, or any other commodities, as a currency, 
as money, as a legal tender. The consequence is, that, when a 
foolish and unwise nation has parted with all its cash, on the theory 
of Free Trade, though it be ever so rich in other commodities, it 
can trade no more ; or if it has only parted with enough to cripple 
its commercial position, it is a bad business. It is, therefore, haz- 
ardous for a nation to part with its money, in foreign trade, on 
the principle, that it can be bought back again with other com- 
modities, as certainly and as easily as money itself can buy that 
which is in market. In the meantime, when there has been an 
inconvenient drain of money to foreign parts, how is the nation to 
carry on its home trade ? Doubtless, by waiting long enough, and 
with great sacrifices, the money will come back, by reversing the 
mode of business, in selling more of other commodities than is 
bought ; which again demonstrates the fallacy of the doctrine, the 
practical operation of which brought the nation into this trouble. 

The following is one form of Adam Smith's argument on this 
point : " A country that has wherewithal to buy wine, will always 
get the wine which it has occasion for ; and a country which has^ 
wherewithal to buy gold and silver, will never be in want of these 
metals. They are to be bought for a certain price, like all other 
commodities ; and as they are the price of all other commodities, 
so are all other commodities the price of these metals. We trust 
with perfect security that the freedom of trade, without any atten- 
tion of government, will always supply us with the wine which we 
want ; and we may trust with equal security, that it will always 
supply us with all the gold and silver which we can afford to pur- 
chase or to employ, either in circulating our commodities, or in 
other uses." 

It can not but be seen, that the great error of Adam Smith and 
his school, on this point, is, that they not only call money a com- 



AND AS THE INSTRUMENT OF TRADE. 207 

modlty in trade, which is true when it is bought and sold, and is 
not employed as money ; but that they fail to consider its peculiar 
and appropriate functions in trade, when discharging the offices of 
money. They do not, so far as this point of their argument is con- 
cerned, allow it to have any functions at all ; but represent it as 
passive, like the commodity for which it is exchanged, in any par- 
ticular transaction. But gold and silver, when employed as money, 
are taken out of their position as commodities in trade, and used as 
an agent or instrument to carry on trade. They are technically, 
" tools of trade." In this capacity or function, they are the motive 
power of the commercial world. They do not, as before shown, 
in the discharge of this office, occupy the same position as the com- 
modities which they move, in the act of being exchanged for them. 
The commodities are passive, in relation to this act ; and money is 
the agent. When money has moved one, it moves another, and 
so on, without any definite limit ; and the same act may be per- 
formed an indefinite number of times every day, by precisely 
the same sum of money, in application to as many different com- 
modities. 

Adam Smith himself was aware of all this, as he could not but 
be, and as the following citations from him will show : " The great 
wheel of circulation is altogether different from the goods which 
are circulated by means of it." — "Money, the great wheel of cir- 
culation, the great instrument of commerce, like all other instru- 
ments of trade, though it makes a part, and a very valuable part of 
the capital, makes no part of the revenue of the society to which it 
belongs ; and though the metal pieces of which it is composed, in 
the course of their annual circulation, distribute to every man the 
revenue which properly belongs to him, they make themselves no 
part of that revenue ;" that is, no part of the commodities purchased 
by them, to be consumed or used. — "When we compute the quan- 
tity of industry which the circulating capital of any society can em- 
ploy, we must always have regard to those parts of it only, which 
consist in materials, provisions, and finished work. The other, 
which consists in money, and which serves only to circulate these 
three, must always be deducted. In order to put industry into 
motion, three things are requisite : materials to work upon, tools 
to work with, and the wages or recompense for the sake of which 
the work is done. Money is neither a material to work upon, nor 
a tool to work with ; and though the wages of the workmen are 
commonly paid to him in money, his real revenue, like that of all 



208 DIFFERENCE BETWEEN MONEY AS THE SUBJECT, 

Other men, consists, not in the money, but in the money's worth ; 
not in the metal pieces, but in what he can get for them," to wit, 
the commodities wanted. 

It will be observed, that Adam Smith, here, not only ascribes a 
peculiar function to money, but places it in a peculiar position, as 
is right. He does not rank it among the things, or commodities, 
exchanged, but endows it with the faculty of making those ex- 
changes, as "the instrument, as the great wheel of circulation;" 
and although he says truly, that it is a part, and a very important 
part, of the capital of society ; nevertheless, the function he ascribes 
to it is so peculiar, that it is not to be computed with, but " to be 
always deductecr'' from, those parts of "the circulating capital of 
society," which put and keep industry in motion, because " money 
serves only to circulate" those other parts. This is its function. 
Surely, then, Adam Smith himself has put it quite far asunder, in 
its position and functions, from the things which it "circulates," or 
acts upon — quite far enough for our present purpose. 

Let us, then, return, and try Adam Smith by Adam Smith. He 
says : " A country which has wherewithal to buy wine, will always 
get the wine which it has occasion for." Very good. He adds : 
" And the country which has wherewidial to buy gold and silver, 
will never be in want of these metals." No one can fail to see, 
that he has here begged the question, as a step-stone to his conclu- 
sion; in other words, has asserted an identical proposition — a mere 
truism. The " wherewithal" is the thing required, and having, by 
hypothesis, put the country in possession of that, to start with, of 
course it ought to do well enough. If the country has money, or 
anything else which the wine-makers want, or which a third party 
will take for the wine, it can get it ; but if the wine can only be 
had with money, then money is the only " wherewithal" to buy it. 
Parties in trade are not to be forced. Commercial transactions 
have always to do with two wills and two interests, at least. 
Money is the only thing that will buy everything else. A man may 
have plenty of substantial capital, and yet not find it easy to buy 
money with it, if he has been so unwise as to get out of money. 
He is in absolute peril of bankruptcy, if his position requires 
money ; at best, he is embarrassed. 

But this is not the end. He says : " They," gold and silver, 
" are to be bought for a certain price, like all other commodities." 
This seems very plausible, and in one sense, is true. But it will 
be observed, that he does not use the term money here, but gold 



AND AS THE INSTRUMENT OF TRADE. 209 

and silver ; and that, instead of investing them with the peculiar 
attributes he has ascribed to money, in the passages above cited, he 
puts theni in the same class and position with all other commodi- 
ties, not as' agents, but as subjects of trade ; not to buy and sell 
with, but as things to be bought and sold ; and it is true, that gold 
and silver, when not used as money, occupy that position. Rich 
men and rich nations, in a prudent way of living, can easily buy 
gold and silver, as subjects of trade, and are accustomed to do it ; 
but those men and those nations, who, by mismanagement, have got 
embarrassed, though they may have other capital in abundance, 
can not do it so easily. Here is the distressing point of Adam 
Smith's hypothesis. If his reasoning avails anything in the case, 
it is intended to represent, that a man or a nation that has traded 
so freely as to get out of money, is just as well off as the man or 
the nation that has taken care to keep enough money in bank to do 
business with ! Is it not so ? 

But he is involved in a still greater absurdity. He adds: "And 
as they," gold and silver, " are the price of all other commodities, 
so all other commodities are the price of these metals." Let us 
put this proposition in another form, and see how it will look : 
"And as they," gold and silver, "will purchase all other commodi- 
ties, so will all other commodities purchase gold and silver." No 
one will deny, that this is a fair statement of the case ; for it is the 
very case ; nor will any deny, that it is untrue ; absolutely untrue, 
as a reliable condition, in the experience of life. It is because 
money is the only common currency of the world. What, then, is 
a nation to do, that has traded so freely as to get rid of all its 
money ? Why, simply, take a new start, trade more prudently in 
future, and under great inconveniences and with immense sacri- 
fices, get up again, as every man is obliged to do, who, by trading 
in the same loose way, has got into the same trouble. 

This is only one of a multitude of instances, in which Adam 
Smith and his school reason precisely in the same way, whenever 
they approach the doctrine of Free Trade. Adam Smith could 
not but be right, as seen above, when he was talking about the po- 
sition and functions of money, in negotiating exchanges ; and he 
could not but be wrong, when he turned his back on that reasoning, 
and undertook to show, that it was just as well for a nation, or a 
man of business, to be without money, as to have it at command. 

But let Adam Smith answer Adam Smith yet farther on this 
point: " The merchant generally finds it more easy to buy goods with 
14 



210 DIFFERENCE BETWEEN MONEY A^ THE SUBJECT, 

money, than to buy money with goods. . . Money is the known 
and established instrument of commerce, for which everything is 
readily given in exchange ; but which is not always with equal 
readiness to be got in exchange for everything. . . When the mer- 
chant's goods are upon hand, he is more liable for such demands 
for money as he may not be able to answer, than w^hen be has got 
their price in his coffers. He is more anxious to exchange his 
goods for money, than his money for goods. A merchant, with 
abundance of goods in his warehouse, may be ruined by not being 
able to sell them in time." It is true, foreseeing the application 
of this reasoning, he adds : " A nation or a country is not liable to 
the same accident." A nation is, nevertheless, liable to precisely 
the same accident, as our own experience proves, in the examples 
hereafter cited in this work. But Adam Smith confesses that " the 
nation in such a case might suffer some loss and inconvenience, 
and be forced upon some of those expedients which are necessary 
for supplying the place of money." This, surely, is enough from 
him, to answer himself. He was right in saying that " the quantity 
of coin in every country is [should be] regulated by the value of 
the commodities to be circulated by it ;" but he was wrong when 
he said it was just as well to have less than enough, as enough for 
this object ; and he was right again when he confessed that for 
want of enough, " a nation might suffer inconvenience and loss, 
and be forced upon some of those expedients which are necessary 
for supplying the place of money." So generally, when Adam 
Smith is wrong in one place, he sets Adam Smith right in another; 
but the misfortune is, that many take his wrong for right. 

M. Say observes: "If the merchant finds the precious metals a 
more profitable foreign remittance than another commodity, it is 
likewise the interest of the state to remit in that form ; for the 
state can only gain and lose in the persons of its individual subjects ; 
and in the matter of foreign commerce, whatever is best for the 
individual is best for the state also." 

One is astonished to find him saying in a note to this averment, 
that " this position applies to foreign commerce only. The mo- 
nopoly profits of individuals, in the home market, are not entirely 
national gains." Smith and all the economists — not excepting 
Say himself, when he is himself — admit, that, in the home trade, 
the nation retains both the values exchanged, as well as the profits 
on both sides; whereas, in the foreign trade, it realizes only 
one side of the double benefit. Observing the word " monopoly" 



AND AS THE INSTRUMENT OF TRADE. 211 

here lugged in by force, as it evidently is, we have been forcibly 
struck with the suspicion that M. Say had some special, personal 
reasons for such a violation of sound reasoning. To maintain that 
the nation is a gainer, when the merchants are enriched by such 
excessive importations as to drain the country of its specie, and as 
a consequence to paralyze all branches of business, and at the 
same time to say that " the profits of individuals in the home mar- 
ket are not entirely national gains," when both values exchanged 
are retained, with the profits, " monopoly" or not, is somewhat 
more than an absurdity. The sly use of the cant word '* monopoly" 
here, was unbecoming the dignity of a philosophical debate. A 
man in a passion may, perhaps, be excused for not protecting him- 
self in argument, as well as for want of reason in his protestations. 
The fallacy of the main proposition above cited, may be thus 
shown. A man owes a debt, and is obliged to pay it, or be dis- 
honest, or turn bankrupt. In this sense, it is his interest to pay ; 
at the same time, it may be very inconvenient. A nation, by over- 
trading with foreign parts, in buying more than it sells, through its 
merchants, owes a debt to foreign parts, at one or more points ; 
and that debt is obliged to be paid. The merchants who created 
this debt, and who make the remittances, have, we will suppose, 
made their fortunes. And the doctrine of Say is, that the nation 
can not be benefited less than the amount of benefit to these mer- 
chants. These merchants have got rich by selling their goods to 
the people; the people, having paid for the goods, and consumed 
them, are minus both the money and the goods ; the merchants 
have got a part of this money, and are rich ; foreign parts have 
got the other portion, being the major part of it, and the nation is 
minus that major part, and the goods, too, which are consumed in 
food, drink, clothing, and in other ways. M. Say holds that the 
nation is richer ; and as much richer as the profits of these mer- 
chants. Can anybody see how that is? If the imports had been 
permanent capital, and gone into the improvements of the country, 
and if the nation, after paying the balance, had money enough left 
for its trade, one can see a national benefit. But this is not the 
case. M. Say, and all of his school, hold, that, in all cases, ab- 
solutely and unconditionally, the nation is benefited, enriched, by 
exchanges abroad, though the buying exceeds the selling, and 
though the balances are settled by cash ; or rather, to present the 
theory in their own form, they aver that the buying can not exceed 
the selling ; and that it makes no difference whether a nation parts 



212 DIFFERENCE BETWEEN MONEY AS THE SUBJECT, 

with cash in trade, or with other commodities ; nor what proportion 
the cash parted with, may bear to that received. If money is 
given, they say, it is only a commodity, and that really, there is no 
balance in the case ; but accounts are even, and all parties are ben- 
efited. 

Here, as will be seen, is the great error we have been endeav- 
oring, among others, to expose, viz., overlooking the peculiar po- 
sition and functions of money in trade, and ranking it with all other 
commodities, in every particular, as a subject of trade. In that 
view, M. Say's conclusion is correct ; but the doctrine, reduced to 
practice, can not but be fatally erroneous, with nations as well as 
with individuals. Unless a nation has mines, like the states of 
Mexico and South America, and trades in the precious metals as 
indigenous products, it can not generally afford to buy of other 
commodities than money, more than it sells, and pay the balance 
in money. Our own commercial history, as exhibited in subse- 
quent parts of this work, is all the argument that need be offered 
here, if an appeal to common sense were insufficient. 

" A View of the Progress of Political Economy in Europe, since 
the 16th Century,'*^ by Travers Twiss, London, 1847, lately pub- 
lished, as a course of lectures at the university of Oxford, is wor- 
thy of some notice. Like the British economists generally. Pro- 
fessor Twiss is of the school of Adam Smith. It may, however, 
be observed, that this " View," &c., taking the confession of the 
author in his preface — the truth of which is sufficiently demon- 
strated by the production itself — is entirely a one-sided view. He 
candidly says: "I have attempted to assign to the chief writers 
their due shares, respectively, in furthering the progress of sound 
opinions ; but I have purposely omitted the names of many authors 
of eminence who have struggled to retard that progress," &c. 
One can not, therefore, after such a confession, expect a very fair 
" view" of this department of history, from such a hand. 

Having repeatedly recognised the distinction which we have 
made in this chapter, between money as a subject and as the in- 
strument of trade — though not in the same terms which we em-« 
ploy to designate it, nor for the same purpose — unlike his brethren 
of the same school, Mr. Twiss has presumed to face this principle, 
while on the subject of what is commonly called the balance of 
trade, and flatly denies that it has any application here. He ob- 
serves : " If it be said, foreign commodities will be paid for with 
money [so far as the imports exceed the exports], let it not be over- 



AND AS THE INSTRUMENT OF TRADE. 213 

looked that the gold or silver which is given in exchange for for- 
eign commodities, is exchanged away as a commodity, and not as 
money. . . It is in the character of a commodity, that gold or sil- 
ver becomes an article of foreign commerce." Here, as will be 
seen, is the same old song. 

We are heartily glad, that any member of the Adam Smith school 
has at last dared to face this point of the main question ; for there 
are many points, any one of which, properly concluded, is decisive 
of the whole ; and this is one of them. Professor Twiss has, man- 
ifestly, put all at stake here, on the tenableness of his assumption. 
If money remitted from a nation, to setde balances run up by an 
excess of imports over exports, taken as a whole, is, in that trans- 
action, discharging the functions of money, and is not a mere sub- 
ject of trade, as averred by Mr. Twiss, all other arguments for 
Free Trade are of no avail. It is lost on the cast of this single die. 
Let us see. 

First, as to what we concede. We concede, that money, in 
passing from one nation to another, is weighed in the scales, as the 
common currency of the world. But this, in effect, is also true of 
every coin, in its domestic round, as a legal tender. The mint as- 
says determine its weight and degree of purity, and it is legalized 
only on that assumption. The law weighs, and the mint declares 
the weight, to save the public the trouble ; and the currency of any 
coin whatever, in a given state, is authorized precisely on the same 
principle, which regulates the currency of gold and silver between 
nations. Next, we concede, that, generally — we have no objec- 
tion to admit, that, universally — there is a commercial agency em- 
ployed in the remittance of money from one nation to another ; that 
that agency is paid for this service ; and that the money, in the 
hands of this agency, from the time it is received at home and paid 
abroad, is, so far as the agency is concerned, a subject of trade. 

But, observe, that precisely the same is true of a remittance from 
New York to New Orleans ; or from the latter to the former city ; 
or from any one city or place in the Union, to any other place or 
city, when it is made by a commercial agency, or by a bill of ex- 
change. In the hands of this agency, and so far as it has to do 
with it, the money is a subject of trade, because the agent is paid 
for doing the service. We think Professor Twiss must have a very 
bold front, to say, that the employment of this intermediate agency, 
in whose hands the money is a subject of trade, as in the case of 
every broker's or banker's business, at all affects the position o** 



214 DIFFERENCE BETWEEN MONEY AS THE SUBJECT, 

relations of the debtor and creditor, at the two opposite ends of this 
transaction, or tends, in any degree, to transform the creditor into a 
buyer of money, when he receives his pay, or the debtor into a 
seller of money, when he remits it. And yet, this transformation 
is necessary, to justify Mr. Twiss's assumption. 

But we are willing to rest this question on a rule laid down by 
Mr. Twiss himself, in the following words : "We must never lose 
sight of the fact, that gold or silver, strictly speaking, is never pro- 
ductive, when discharging the functions of money, but only when 
it is exchanged as a commodity." We are satisfied with this rule, 
and only regret, that the economists of Mr. Twiss's school had not 
laid it down from the beo^innino^ as it would have saved a world of 
debate. It marks the distinction precisely between money as a sub- 
ject and as the instrument of trade. Surely, Mr. Twiss would not 
pretend, that the profits of brokers and bankers, as agents in settling 
the accounts between debtors and creditors, force this settlement, as 
a transaction between the two latter parties, into an act of produc- 
tiveness. What is the reward of the debtor for paying, or of the 
creditor for receiving, the amount of the debt ? Does the former 
give less, or the latter receive more, than the debt? If Mr. Twiss 
should insist, that the profits of brokers, bankers, and other agents, 
in settling foreign accounts, annihilate the functions of money in the 
gold and silver, so remitted, then the principle applies to all domes- 
tic settlements, under the same national jurisdiction, and neither he, 
nor anybody else, will ever be able to find what he himself acknowl- 
edges to be the proper functions of money ; for we will venture to 
say, that no account was ever settled, and no money ever paid, 
without expense to at least one party, and consequently not without 
a corresponding benefit to some other party. Such, as every one 
will see, is equally the fact in negotiating domestic as foreign bills 
of exchange. Men, in paying debts, will always take the cheapest 
way, and will employ secondary or intermediate agencies, as little 
as possible ; but it is not often that they can do altogether without 
them, and never without some expense of time, or in some other 
•way. They may be obliged to trade off money under par, or they 
may have money worth a premium, Does the sacrifice in the for- 
mer case, or the profit in the latter, both of which involve trading 
in money, annihilate the functions of money, when the considera- 
tion is rendered to satisfy the debt? 

It may be observed, as a general rule, that money, that is to say, 
gold and silver, in any considerable quantities, never move from 



AND AS THE INSTRUMENT OF TRADE. 215 

one remote point to another, as between New York and New Or- 
leans, or between Europe and America, till the rates of exchange 
are so high at one point as to pay the agencies of remittance, in- 
cluding insurance, to the other. Until the rates of exchange will 
defray this expense, accounts between debtors and creditors in such 
remote points, are adjusted by bills of exchange. Whether this 
adjustment or settlement is effected by bills or by the transfer of 
bullion or specie, the transaction between the debtor and creditor 
is precisely of the same nature, as when a citizen of New York, wilh 
basket in hand, pays cash for the materials of his dinner which he 
buys in the market. The cash, in both cases, equally and alike 
discharges the functions of money. If the keeper of an hotel em- 
ploys a caterer to go to market, instead of going himself, the wages 
of this agent occupy precisely the same position as the premiums 
on exchange, or as the pay for the transfer of specie, between New 
Y^ork and New Orleans, or between New York and London. None 
will deny, that the cash used in the former case, discharges the 
functions of money ; but it is not without expense, whether the 
keeper of the hotel goes himself to market, or employs an agent. 
All these intermediate commercial agents are parts of the economy 
of the commercial world ; and the reason why they are employed, 
is because it is economy. If the debts from New Yoi4c to New 
Orleans are so much greater than those from the latter to the former 
city, as to pay for the transfer of specie, then specie travels instead 
of bills of exchange ; and in this transfer, it discharges the func- 
tions of money, notwithstanding that the transaction is productive 
to the agents. The same is the case in the transfer of specie from 
one nation to another. Who can find or fairly make a difference ? 
Will Mr. Twiss say, that the twenty or twenty-five millions of 
dollars, remitted from Europe to the United States, in 1846 and 
3 847, for breadstuffs, did not perform the functions of money, be- 
cause it was productive to the agents of the transfer ; or that it was 
no disadvantage to Great Britain to have parted with so much 
specie, because she received a quid j}ro quo in return ? And will 
he say this, in the face of one of the most overwhelming instances 
of the poverty of the precious metals, with which the British empire 
was ever visited ? Yet, according to his doctrine, and that of the 
Adam Smith school, this twenty-five millions of dollars did not 
come from Europe to the United States as money ; but only as a 
commodity, in exchange for other commodities. Nay, niore: 
according to this doctrine, both parties were benefited by the 



216 DIFFERENCE BETWEEN MONEY AS THE SUBJECT 

trade. The famine in Ireland, and the general short crops of Eu- 
rope, were not a calamity to those parts, since they had all the 
profit of trading away the commodities of gold and silver for the 
commodities of breadstufFs. Such, legitimately, are the conclu- 
sions of the Adam Smith school. But, while we are writing this 
page, October, 1847, the great commercial houses of Great Britain, 
one after another, in rapid succession, are tumbling to ruin in 
heaps, like as a circle of bricks set on end, near enough for contact, 
when one falls, the whole line goes down in succession ; and with 
this ruin comes universal distress. And yet Mr. Twiss says. 
Great Britain has parted with no money ; she has only parted with 
a commodity ! 

We agree with Mr. Twiss, that " it must never be forgotten, 
that the capital of a country, which is employed as money, is not 
employed as an instrument of production ; but simply as an instru- 
ment to facilitate the exchange of other capital." But when he 
says : " let it not be overlooked, that the gold or silver, which is 
given in exchange for foreign commodities, is exchanged away as 
a commodity, and not as money," he is in direct contradiction 
with the above-cited proposition from his own hand, and evinces, 
that a professor of Oxford university must not only sympathize with 
the policy of the British government, but that he is forced to ex- 
ecute its behests, in violation of his reasoning powers, peradven- 
ture, of his conscience ; unless, forsooth, charity should allow, that 
a man's social connexions may exercise dominion over his judg- 
ment, as is, no doubt, sometimes the case. But Mr. Twiss him- 
self, againsfhimself, as almost every other member of his. school 
has done, in one form or another, has confessed the true doctrine, 
in the following words : " When gold or silver is employed as an 
instrument of exchange, it is employed in a different way from that 
in which it is generally employed as a commodity,''^ Is not this 
surprising ? 

We have endeavored to show, in another chapter, that, from the 
time of Adam Smith, including him, there has been an understand- 
ing between the British government and British writers on public 
economy, as to the doctrine of freedom of commerce, which is not 
very consistent with freedom of opinion ; and it w^as not to be ex- 
pected, that a British university would go against British policy. 

Granting, however, for the sake of argument, that gold and silver, 
remitted to settle commercial balances against a nation, does not go 
as money, but only as a commodity ; still, it can not be denied, 



AND AS THE INkSTRUMENT OF TRADE. 217 

that the money is gone. What, then, would this assumption of 
Professor Twiss, or our concession of the point, avail him? "A 
rose, by any other name, would smell as sweet ;" and the money 
of a nation, remitted to foreign parts, to pay debts, would still be 
a calamity, if enough should not be left for the trade of the country; 
and we do not understand these gentlemen as making any pro- 
vision for such a contingency, or for any contingency whatever. 
Their doctrine is absolute. 

There is an habitual mode of reasoning with Adam Smith, Ri- 
cardo, and others of their faith, in ascribing to gold and silver, 
when discharging the appropriate functions of money, the attribute 
of pr/cYf, which, we conceive, leads to obscurity, even to error. 

The world has agreed upon gold and silver, not only as the 
common medium of trade, but as the common instrument to ex- 
press the values of all other things that are worth money, and to 
purchase them ; but it has not agreed on anything to express the 
value of gold and silver, when discharging the functions of money ; 
and there is no such thing. How, then, can gold and silver, in 
this office, be valued ? How can they be worth more or less, than 
themselves, weighed in the scales ? We know, indeed, that gold 
and silver vessels, or any works of art composed of these sub- 
stances, are prized by gold and silver coin. And why? Be- 
cause there are two principles in their value: one their weight, 
and the other their workmanship. Leave out their workmanship, 
and gold is gold, and silver is silver, of equal value, if equally 
pure, according to their weight, whether in coin, or bullion, or 
works of art. It would be absurd to suppose, that gold and silver, 
the instruments of expressing values, should express their own 
value, each for each. There they are, no matter how much in the 
world ; no matter how little ; the world has agreed that they shall 
express all other exchangeable values ; but never, that anything 
else shall express their value. How, then, can they be cheap or 
dear, cheaper or dearer, while acting in the capacity of money? 

Mr. Huskisson, one of the greatest of British statesmen, said, in 
1816, '* Gold, in this country, as silver in Hamburg, is really and 
exclusively the fixed measure of the ridng and falling value of all 
other things, in reference to each other. The article itself, which 
forms this standing measure, never can rise and fall in value, with 
reference to this measure ; that is, with reference to itself. A 
pound weight of gold can never be worth 1 ^ po\mds of gold. The 



218 PRICE NOT AN ATTRIBUTE OF MONEY AS SUCH. 

truth of this, which can not, I conceive, be called in question, 
would not be affected by any imaginable increase or diminution 
in the quantity of gold in the country. . . Gold [in England] is 
the fixed measure of the rising and falling value of all other com- 
modities, in reference to each other." Again he says : " A bank- 
note is not a commodity ; it is only an engagement for the payment 
of a certain specific quantity of money.'''* Lord King said : *' It 
may be assumed, on probable grounds, that the bullion has not 
become dear, but that the paper for which it is exchanged has been 
rendered cheap, because every commodity is cheap or dear, in 
proportion to the abundance or scarcity of the supply." — *' We are 
in error," said Sir Robert Peel, 1847, " when we talk about the 
price of gold. The promissory note is a promise to pay a definite 
weight of gold, and nothing else." Even M. Say comes to our 
aid here as follows: "In treating of the elevation and depression 
of the price of commodities, although value has been expressed in 
money, no notice has been taken of the value of money itself; 
which, to say the truth, plays no part in real, or even in relative, 
variations of the price of other commodities." He also says: 
" The price of an article is the quantity of money it may be 
worth ; current price, the quantity it may be sure of obtaining at 
the particular place." 

"What is worth in anything, 
But so much money as t'will bring ?" — Hudibras. 

The British mind seems never to have disembarrassed itself 
from the effects of the controversy on this point, during the legal- 
ized suspension of cash payments in the bank of England, from 
1797 to 1822, when it was so vital to the empire to support the 
credit of the paper of that bank. Will it be believed, that the 
British house of commons, in 1812, on motion of Mr. Vansittart, 
resolved, by a large majority, that "bank-notes were not depreci- 
ated, but gold enhanced in value?" — "Mr. Chambers," says 
Professor Twiss, " one of the witnesses examined before the bul- 
lion committee, whose reputation for intelligence and information 
stood very high in the commercial world, declared, that he did not 
conceive gold to be a fairer standard for bank of England notes, 
than indigo or broadcloth." It is true, that the bullion com- 
mittee, of which Mr. Huskisson, cited above, was one, came to a 
different and the true conclusion. But the majority of the house, 
either believed in their doctrine, or thought it an expedient measure 



. PRICE NOT AN ATTRIBUTE OF MONEY AS SUCH. 219 

of State policy to keep up this popular delusion, till the contest 
■with Napoleon should be over. The notes of the bank were then 
at a discount of ^13 9s. 6d. per .£100, for gold. It was then 
sixteen years after the bank suspended, and no one could see the 
end of it. The empire, with this dubious and expensive war upon 
its hands, was compelled to subsist, so far as its currency was 
concerned — a vital matter — on the credit of this irredeemable 
paper. It was, perhaps, a patriotic virtue in the house of com- 
mons to decree and announce a stupendous untruth. It was an 
atrocious fraud in legislation, to make the bank-notes a legal tender; 
the cheat was immense, and extended to a quarter of a century. 

No one, of course, will imagine, that we mean to call in ques- 
tion the propriety of speaking of money as dear or cheap, as of 
high or low price, as a subject of trade. It is only when employed 
as the instrument of trade, that we maintain it can have no price 
in relation to the commodities for which it is exchanged. In this 
transaction, price can not belong to both the agent and the sub- 
ject ; but only to the latter. It is the very function of the agent to 
prize the subject. 

M. Say is, in our opinion, right in his advice, that money should 
pass by its weight. But he does not seem to have seen, that, in 
advocating this principle, he has admitted, that money, as the in- 
strument of trade, occupies a position outside of valuation, or which 
is inconsistent with it. Neither does he seem to have recognised 
the fact that his advice has been complied with, in all coins, not as 
coming from him, but before his time, from necessity. All denomi- 
nations of coin, are rated at the mint, according to their weight ; 
and it is known, to all those who trade in them, precisely what their 
legal weight is, and what fractions of them are composed of pure 
metal and alloy. Every coin, therefore, whatever be its denomi- 
nation, always passes, in a common currency, for a specific weight 
of pure metal, though not named to the parties on the face of the 
coin, which is the principle that M. Say contends for. But he 
seems to think that it would have been better, if there had never 
been any other denomination than those of weight, which have 
gone into disuetude, except when the precious metals are subjects 
of trade, as in the practice of bankers and brokers, who use the 
scales for considerable and often for small amounts. M. Say 
moreover says : " If a house be valued at 20,000 francs, it is reck- 
oned to be equivalent to so many pieces of silver coin, of the weight 
of 5 grammes, with a mixture of i^^th alloy." Again : *' The de- 



220 PRICE NOT AN ATTRIBUTE OF MONEY AS SUCH. 

nomination of coin is useful only inasmuch as it designates the 
quantity of pure metal contained in the sum specified." 

M. Say was right, in the principle, that weight is the proper 
denomination of money ; and in advocating it, he surrendered his 
other principle, that money, as such, can be high or low, dear or 
cheap. He doubtless asserted this other principle, on the assump- 
tion, that there is no difference between gold and silver as subjects 
and instruments of trade — an attainment which he seems never to 
have made, and the importance of which has been shown. 

Money is virtually — we might, perhaps, say absolutely — an 
inappreciable thing. It is unnecessary to know the worth of it, 
since all the world have agreed to use it as the medium of trade. 
When employed, the only question between the parties is — how 
much? what quantity? what weight? And when the parUes have 
agreed, that is the price — of what? Of the thing exchanged for 
it — the agreement of the parties being the measure of value, and 
the quantity of money the expression of it, as well as the agent to 
consummate the arrangement, or the instrument of purchase. But 
the money has no price. There is not a thing on earth that can 
prize it ; much less can it prize itself, except in the exchange of 
its own varieties ; for that would be an absurdity. But the moment 
gold and silver, or paper representing them, come to be bought and 
sold, as subjects of trade, they occupy a different position, and 
are prized, like every other commodity, one kind with another. 
A note discounted at the bank, is bought as a subject of trade ; 
while the discount is the price, the instrument, discharging the 
functions of money. The principal sum received by the drawer 
of the note, is also a subject of trade, in this transaction. But he 
goes away and buys corn with it, and then it is the instrument — 
money. He bought it to use as money ; but it did not come into 
his hands as money, but as a commodity in trade. The same is 
the case with all notes of hand, with use. They are sold, and the 
interest is the price. Bonds and mortgages, with use, occupy the 
same position. Bank-notes, above and below par, are bought and 
sold, and the broker's profit is the price. So the profit on bills of 
exchange is their price. The principal sums, or rates of valuation, 
in all these cases, are negotiated as commodities in trade ; and the 
premiums, or discounts, or the interest or profits, are the considera- 
tions asked and received, discharging the functions of money. It 
is the different forms and different vakies of money, and its value 
in use, which create a demand for it, and bring it into market as a 



PRICE NOT AN ATTRIBUTE OF MONEY AS SUCH. 221 

subject of trade. If depreciated or above-par money is employed 
in trade, so as on that account to affect the prices of the commodi- 
ties for which it is exchanged, it is then itself a commodity in 
trade. 

Money, even as a subject of trade, has no price but that of its 
use, and that of differences of value, in different forms, or in other 
accidents of its existence. The first is always reckoned so much 
per centum, as 2, or 3, or 4, or 6, or 10 per cent. This per-cent- 
age is the price, reckoned on the standard of weight, and not the 
sum total, as when it performs the offices of the instrument of trade. 
Then the whole sum is the price of the thing for which it is given 
in exchange. It is on this point that Professor Twiss is right in 
avowing that "money is not productive as an instrument of ex- 
change," or of trade. But when its use is sold, it is productive. 

Money, however, in different forms, and the same forms in dif- 
ferent places or circumstances, has different prices, on the common 
standard of weight. Legislation makes one of these differences, 
as, for example, the English sovereign is declared legal tender in 
the United States, at $4.84 ; but its statute valuation in England is 
only $4.44, which makes them subjects of trade in these two quar- 
ters, and the prices are based on the standard of weight, being not 
the principal sums, but arising out of these accidental differences. 
So of all moneys, metallic or other, being in market as subjects, 
to be bought and sold for use as instruments of trade, either their 
use on time, or their variations from a common standard, and not 
the principal sum, determine their prices. Whereas, when money 
is employed as the instrument of trade, in exchange for other com- 
modities, the entire sum given is the price, not of itself, but of the 
commodity. The price of all moneys bought for use, on time, 
commonly called borrowing, is its per-centage. We never find 
the price of money, as a subject of trade, to be the principal sum, 
in any case whatever; but it is either a consideration for its use 
on time, or a consideration growing out of some one or other 
of the varying accidents of its existence ; and all its prices are 
based on the standard of the scales, directly or indirectly, medi- 
ately or immediately. But money, as the instrument of trade, 
never has a price, its functions being to declare the prices of the 
things on which it acts, and to move them forward to their destina- 
tions — this declaration and this moving power being its proper and 
only functions. The only fundamental measure of money is the 
scales ; though, in the superstructure of a monetary system, many 



222 PRICE NOT AN ATTRIBUTE OF MONEY AS SUCH. 

Other accidental measures are employed, for convenience, all hav- 
ing reference to this, and being based upon it. 

To show that money, as a subject of trade, has no price, other 
than as above defined, observe, that a man, with one bar of gold 
or silver bullion, does not propose to exchange it for another bar 
of the same weight and purity. There is no motive. Nor does a 
person propose to exchange coins for others of the same denomi- 
nation and weight ; nor bank-notes for others of the same denom- 
inations and of the same bank ; nor any kind of money for another, 
where there is no foundation or reason for difference in value, and 
of consequent advantage to one of the parties, which advantage 
would be a foundation of price, or a motive for exchange. There 
is no motive to exchange an equal for an equal. It must be a dif- 
ference of some kind, to constitute the foundation of price in 
money. In purchasing the use of money on time, the principle 
of price is doubtless too obvious to require farther illustration ; 
and enough has already been said to show the different posi- 
tion and proper functions of money, as the instrument of trade, 
and that price, or what Mr. Twiss calls productiveness, does not 
belong to it in that case. 

Convenience requires a uniform rule, either that cheapness or 
dearness should be applied to money alone, or to the things of 
which it is the medium of exchange. Custom has applied them 
to the latter, and ordained money to express all their values. This 
office of money is a law made and obeyed by all the world, and 
there is no antagonist law. There is nothing else by consent or 
practice, that expresses the value of money as such. Ricardo, 
Smith, and others, by violating custom and the ordinances of uni- 
versal consent in this matter, have, we think, introduced confusion 
and darkness where order and light are needed, and plunged into 
an inextricable labyrinth. 



MONEY AS THE "TOOLS OF TRADE." 223 



CHAPTER XV. 

MONEY AS THE 

An Illustration of this Truth. — The Condition of a Nation, after selling its " Tools of Trade," 
the Same as that of a Mechanic who does the same Thing. — Montesquieu's Doctrine on 
this Point. — The Emperor of Russia investing in French Stocks. — Money but an incon- 
siderable Fraction of a Nation's Wealth. — To answer its Purposes, Money should be to 
a Nation as a fixed Capital. — It is " Tools." — Half a Set of " Tools" not as good as a per- 
fect Set. — Money the necessary Means of a Nation's Wealth — The Amount required by 
a Nation, depends on its Re.«ources and Capabilities. — The Charge of a Miser Spirit on 
Protectioni.st8 considered. — Bad Economy to hoard up Money. — The Commercial Revul- 
sions in the United States always owing to the Want of Money as " Tools of Trade.'" — 
A Protective System neces.^ary to keep on hand " Tools" enough. — There has never yet 
been Money enough in the United States for the Business of the People. — Money makes 
the Mare go. — To have Money enough, as " Tools of Trade," is Evidence of Private 
and Public Economy. — Ignorance the Parent of Free Trade in the United States. — The 
Precious Metals are to Society equivalent to a Law of Nature. — Mr. Jacobs on the Uses 
of the Precious Metals. — The (Quantity of the Precious Metals required for the Trade of 
tlie United States. — The Commercial Troubles of this Country owing to unfortunate and 
fitful Changes in the Policy of the Government 

Can a farmer till his grounds without a plough? Can a tailor 
make up his garments, without his shears and needle? Can a 
waterman put forward his boat, without a paddle ; or a ship navi- 
gate the seas, without sails or steam ? Can any work, of any sort, 
be done, without the appropriate instruments ? Money is as much 
the instrument of trade, as the plough is of agriculture, the tailor's 
needle of making garments, the oar of speeding the boat, or the sails 
or steam of navigation. But Smith, Say, Ricardo, M'Culloch, 
Twiss, and their colaborers, tell us, in effect, that the plough is 
only a commodity, and the farmer may as well sell that as his corn ; 
that the needle is only a commodity, and the tailor may give his 
whole stock of tools for his dinner, without inconvenience ; that the 
waterman may barter his paddle for a fish, or the fisherman give 
his hook and line for bait, and both do as well without their tools 
as with ; that the weaver will suffer nothing in selling his loom and 
shuttle ; that the woodman may exchange his axe for a shirt, with- 
out harm to his occupation ; that the smith may part with his ham- 
mer for a saw, in an exchange with the carpenter, and both go on 
with their work; that the shoemaker may exchange his kit of tools 
for a coat, and still work on with profit; in short, that all these things 
are mere commodities, and provided the parties have made a good 



224 MONEY AS THE 

speculation, as a trade, they have done well ; or if they have merely 
got an equivalent, in market values, they can not be losers. Such 
is the doctrine of Free Trade. 

But, money is a nation's ^^¥tt of tools ;'*'' nothing more; nothing 
less. And yet these gentlemen say, it is no matter ; it is just as 
well ; the nation will not suffer the least inconvenience, if it parts 
with its " kit oftools,^^ and obtains, by the exchange, equivalent values. 
They say, in effect, that a shoemaker can still go on making shoes, 
and do as well as ever, if, by exchanging his kit, he gets other 
commodities of equivalent value. It is impossible to escape from 
this issue, on the premises of these gentlemen. No one can deny 
that this is precisely the case which they have made. 

If it be said that a man ought to part with his " tools of trade," 
rather than not pay his debts, it is raising a new question, which is 
one of morality. We go farther back, and anticipate this question, 
in the position, that a man should be more prudent than to allow 
his " tools of trade" to become liable for his debts. This is pre- 
cisely the position we occupy on public economy. We hold, that 
money, enough for the demands of trade, is the ^' tools of trade" to 
a nation, and that its system of economy should be so adjusted and 
managed, as not to put its " tools" in the condition of hability for 
its debts. A nation can not hold on to its "tools," after they have 
become thus liable ; but they must go, till there is no more to go ; 
and then the efflux is barred by exhaustion. The doctrine of our 
opponents is, that a nation is none the worse off, is put to no incon- 
venience, by the loss of its "tools of trade." Is not this the case 
which they have made? If it be not, we know not what is. 

Montesquieu says: "A country which always exports less than 
it receives, maintains an equilibrium by impoverishing itself. It 
will continue to receive less, until it will have reached a state of 
extreme poverty, when it will cease to receive anything." 

Exactly in point comes the news, while we are writing this 
page, of the transaction of the emperor of Russia with the bank of 
France, in the purchase of 50,000,000 francs of its stocks, or 
nearly $10,000,000. It is understood — we beheve it was openly 
avowed on the bourse at Paris — that the object of the French gov- 
ernment, in lending its intermediate offices, to obtain these stocks 
for the emperor, at the middle price, was to bring fiftv millions of 
specie into France, which was pressingly required — France hav- 
ing parted with too much of her " tools of trade," and being threat- 
ened with commercial bankruptcy and financial ruin. It was to 



MONEY AS THE "TOOLS OF TRADE." 225 

bring back these " tools ;" and the necessity of France, in this 
case, subjected her to some peril, as it will at any time be in the 
power of the emperor of Russia, by a coup-de-main operation, sud- 
"denly to throw these stocks into market, and create a panic, to the 
great injury of France. But " necessity knows no law." France 
wanted more "tools of trade," and must have them. If these 
stocks had been sold in Paris, to Frenchmen, the price would not 
have come from abroad, to meet the exigency ; but, in selling them 
to the emperor of Russia, it brought 50,000,000 of francs directly 
into France, as so much addition to its " numeraire," or cash. But, 
according to Adam Smith and company, it was no misfortune to 
France to have wanted this amount of specie, nor any benefit to 
get it.* 

Because money will supply wants and gratify desires, by pro- 
curing the means, it is thence too naturally concluded, that wealth 
consists in money ; it is true, that a given amount of money, in any 
one's possession, makes him a rich or wealthy man, according to 
the standard of wealth assumed. Nevertheless, money, though it 
may be the fortune of an individual, because it will supply his wants 
and gratify his desires, is not, in itself, any considerable part of 
the wealth of a community or of a state. If the annual product 
of the industry and labor of the people of the United States, be 
$2,000,000,000, as is supposed, that product is an exponent of 
their wealth ; and it is supposed, that not a penny of k consists in 
money. We do not produce money, to any extent w^orth naming. 
If it requires fifty millions of money to move such portions of this 
product to their various destinations, as are not consumed on the 
premises where they are created, say a moiety of them, then the 
amount of money employed in moving these products to their des- 
tination, is as one fortieth of their amount. And if this product 
be to its sources and means, or to the capital of the country, as 6 to 
100, the rate of interest, then the money of the country is only 
as J^th of itoths of the national capital — a fraction of the general 
wealth hardly worth naming. 

The position and functions of money, in this movement, are to 
the people, as the " tools of trade" to a man in any pursuit. As a 
man can not do his business without his tools, so neither can a peo- 
ple trade without money. Money, with a nation, is permanent, and 
* Since writing the above, the French revolution of February, 1848, has occur- 
red; but that makes no difference with the arsuaaent. France was in want of 
specie at that time, under Louis Philippe, and this transaction was negotiated to 
obtain it. 

15 



226 MONEY AS THE 

ought to be fixed capital, as the tools of a mechanic are. It occu- 
pies the same position in trade. If a mechanic has but half a set 
of tools, he can not work, except under great disadvantage. It is 
the same with a people, in regard to money : they want a complete 
set of tools, and will work very badly with half a set. And yet 
Free Trade says, it is no matter, whether you sell your tools, or 
your other commodities. 

That money is a fraction of the public wealth, as permanent cap- 
ital, occupying the position, and discharging the functions of tools, 
in creating and promoting general wealth, can not be denied ; but 
it is a small fraction ; in the strict sense, it can hardly be called 
wealth ; but is more properly the means of it. But, as it is the 
most essential element of wealth, in public economy, as a means, 
there is no harm in calling it by that name, so far as it goes, if its 
proper position and functions are understood. It is certain, there, 
can be no wealth, in the sense of prosperity, without it. If fifty 
millions of active money capital are necessary to move all the sur- 
plus products of every point of the United States, to their destina- 
tion, anything less than that would be a check to the movement ; 
half of it would be a very serious calamity, and occasion universal 
distress. And yet Free Trade says, it is no matter : half is as good 
as the whole. Adam Smith, as shown in another place, undertook 
to prove, that the American colonies were very well off, when they 
had no money at all. 

Money itself is no farther wealth than as the means of producing 
it, and for the amount of the precious metals which it comprehends, 
they being in demand for other uses ; and the money of a country, 
and of the world, as shown above, is but a small fraction of its 
wealth. It may happen that all of an individual's wealth is vested 
in money ; but that of a nation can never be ; nor more than a 
small fraction. 

The amount of money which a nation requires, to effectuate the 
greatest amount of production in exchangeable values, and to cir- 
culate them so as to produce the greatest income, in other words, 
to move all surpluses to the best market, is a question of considera- 
ble importance. The European economists seem to agree, so far 
as we have observed, that a nation requires only money enough to 
circulate its exchangeable values which require movement in trade, 
to and fro, outward and inward. This doctrine is doubtless cor 
rect; but their idea of the application of it, would not exactly suit 
us. They appear to assume a ne plus ultra of demand, an ascer 



MONEY AS THE "TOOLS OF TRADE." 227 

tainable limit, from an existing state of things ; that is, that this 
state of things has nearly or quite exhausted its requirements or 
uses of money. This does not apply to the United States. We 
have never yet come in sight of the end to which an increase of 
money might not be profitably applied for the production of wealth, 
so inexhaustible are our resources ; nor has there ever been a time 
when it could be said there was too much money, or even enough, 
in the country, so as to want use. The extravagant speculations 
of 1836-7, are not in point ; because they were not based on 
money ; but were mere bubbles, doomed to burst, for want of 
money as a foundation. 

A system of public economy, therefore, adapted to the state of 
things found in Europe, limiting the uses of money, and thus 
limiting the amount required, maybe very ill adapted to the United 
States, where the uses for money are comparatively without limit. 
The " kit of tools" for the trade and commerce of Europe, might 
be very complete, under a system, which would leave ours very 
incomplete. It is for us to judge what we want, and for them to 
judge what they want. It is evident that European economists 
had no idea of the state of things here, in this particular. When 
was there a time, that this nation, or any part of it, or any party or 
person in it, could not have done more in the production of wealth, 
if they had had more money to do it with ? We want, then, a sys- 
tem of public economy, which shall not only tend tokeep in the 
country what is commonly reckoned enough of money, to carry on 
its trade and commerce ; but we want a system that shall tend to 
increase that amount, as far as may be, in a degree, commensurate 
with the development of the means for its profitable use. As yet, 
it has never been so. 

It is unfair, and shows a want of candor, when Smith, Say, Ri- 
cardo, M'CuUoch, and others of that school, while engaged in 
their argument on the balance of trade, treat their opponents as 
misers, wishing to hoard up money; or to represent them as in- 
sisting on taking nothing but specie for what they sell. It is easy 
to set up a man of straw in this way, and knock him to the winds, 
appearing to come off victorious. But this is not our position. 
We only insist, that a nation must so regulate its trade with foreign 
parts, that, taking it all together, more money should not habitually 
go from the country, than comes back ; that, if more specie is an- 
nually exported than is imported, the nation will soon be in com- 
mercial troubles, for want of money to trade with; that, in the 



228 MONEY AS THE " TOOLS OF TRADE." 

United States — we do not speak for other nations — a protective 
system is indispensable to prevent such a public disaster ; that, 
under such a system, we do not trade less abroad, as our op- 
ponents aver, but more ; that, in the long run, both our exports 
and imports of other commodities than money, will be greater; and 
that the only way for us to secure this growth and prosperity of 
commerce, is by a protective system. Such being the operation 
of this system, when properly adjusted, as proved in other parts of 
this work — it being supposed that we draw in as much money as 
we send out, and rather more than less — money, as the instrument 
of trade, is never wanting, can not be wanting. Not that we pro- 
pose to have any lie idle. That would be waste. There would 
be little danger of that, so long as the untouched resources of 
wealth in this country, are so many and so great ; and so long as 
a moiety of its capabilities, more or less, are forced to lie in repose 
for want of means. 

It is decidedly bad economy, in a man or a nation to hoard up 
money. If a thriving man gets more money than he wants to use 
in his business or trade, he will invest it somewhere, that it may 
do business and trade without his agency or care, and afford him 
an income. But as a prudent man, he will take care not to have 
less money at his command, than his business or trade requires. 
In case he should have less, his affairs will suffer, and his estate 
will be injured. He may even be so embarrassed as to be forced 
into bankruptcy, broken up, and perhaps ruined — all for want of 
a sound system of economy, for buying too much, and running 
in debt without means to pay. So a nation, for precisely the same 
reasons, may fall into the same situation, in its foreign commercial 
relations, as has several times happened to the United States — all 
for want of a sound system of public economy. And such a sys- 
tem, it will be observed, as its name imports, is directly opposed to 
a system of Free Trade. It will also be observed, that, whenever 
commercial revulsions have come over this country, it was in con- 
sequence of the prevalence of Free-Trade principles and practice. 
There is no difference between the loose and profligate habits of 
private individuals, which involve them in pecuniary troubles, 
and Free-Trade, which always brings like consequences to this 
country. 

Although it is not as bad for a man or a nation, to have money 
hoarded up and lying idle, as to have too htde, and though it can 
not be said to be positively calamitous, nevertheless, it is bad econ- 



MONEY AS THE " TOOLS OF TRADE." 229 

omy — it is waste. And as it is important for a man to have money- 
enough for his own business, so it is equally important for a nation ; 
and the same means, in both cases, that is, private economy in one, 
and public economy in the other, must be employed for the attain- 
ment of this end. In the one case, the rules are private ; in the 
other, 'public; but in both, they are equally opposed to Free 
Trade. The system of economy in each case consists in a tariff 
of duties, the great aim of which is, not to buy too much, to live 
within means, and to have plenty of means ; that is, plenty of 
" tools of trade." 

Nor is there any danger that money being plenty, will lie idle, 
except in a miser's chest, or a monarch's vault. And misers cer- 
tainly are diminishing in numbers as commerce enlarges its sphere, 
and becomes more active and more productive. Men usually, es- 
pecially the Anglo-Saxon race, and more especially the American 
branch of that race, are too sensible of the value of money, as a 
productive power, not to put it to use as it accumulates. There 
never yet has been a time, in the history of this country, when 
there was an excess of money in it, above the demands for its use, 
or beyond the scope of the subjects of a profitable investment; 
especially, and more than all, profitable to labor ; and the greatest 
commercial evil the country has ever suffered, has been the want 
of money. One single fact, viz., the more than double value of 
money in the United States, as compared with its average value in 
Europe and other foreign parts, is conclusive evidence on this 
point. The incalculably diversified and yet undeveloped resources 
of this country, and its unassayed improvements of which it is so 
immensely susceptible, present a field for the employment of money, 
that is vast and boundless — a field which has long invoked, and 
still invokes, without response, an application of capital, in an 
amount which ages of the greatest prosperity will not furnish. As 
a question of public economy, therefore, and one of the greatest 
moment, it seems to be imperatively demanded, that our system of 
foreign commercial policy should be so arranged and adjusted, as 
to draw moneyed capital to the country, and retain it here for the 
execution of these grand and momentous objects ; above all, that 
this policy should not be left so loose and free as to oblige us to 
lose money in our foreign trade, as we have done heretofore, and 
thus not only disappoint and put far off these great and stupendous 
home enterprises, but cripple and embarrass the comparatively 
small endeavors already attempted, which are with difficulty 



230 MONEY AS THE " TOOLS OF TRADE." 

sustained, and some of which, indeed, are in danger of overthrow 
or suspension, for want of means to carry them on. Nothing but 
the protective policy can supply us with the money capital which 
the country needs ; and without it, as has uniformly been the result 
of all our Free-Trade experiments, we shall be impoverished and 
broken down. 

The old adage, " money makes the mare go," though trite, and 
apparently below the dignity of literary composition, nevertheless 
contains an important practical principle. But the great secret is, 
how to get money, how to keep enough on hand, or at command, 
for necessary uses, and how to put it to the best use. This practi- 
cal part is justly called economy, in both private and public 
affairs. It is strange that theorizing, as in the case of the advo- 
cates of Free Trade, should lead men so far astray as to allow 
them to maintain that the products of labor, other than money, can 
be made active and productive in trade, without money; and that 
it is of no injurious consequence for a commercial nation to part 
with all its cash, when Free Trade draws it away. They do not 
consider that money is the moving power ; but seem to take pleas- 
ure in believing a hard thing, holding it for true, not because the 
truth is apparent, but occult — taking pride in a doctrine because a 
piiracle only could verify it. Their own importance is magnified 
only by their extravagance, and by the extent to which it is carried. 
Still, every sober man must see that money is power — -power with 
a man and power with a nation — and that every man and every 
nation, without money, and being unable to command it, is power- 
less. This truth is directly opposed to a fundamental proposition 
of the Free-Trade doctors, Smith and others, that money occupies 
the same position in trade with that of the commodities for which 
it is exchanged — is itself no more than a commodity in trade — 
and that, therefore, it is no matter in trade, which goes and which 
comes, that or any other commodity. When a doctrine like this, 
is permitted to enter practically into a system of private or public 
economy, as an element, a leaven, pervading the whole, it is surely 
no wonder if the affairs of such a system, private or public, come 
to a very bad result. Nothing but extraordinary good luck could 
prevent it, and that only for a lucky season. The doctrine, "per 
se," is ruinous. 

The peculiar and exclusive position which gold and silver, as 
money, occupy in the world — a very important and potent one — 
is that they are universally recognised as a common currency in 



MONEY AS THE "TOOLS OF TRADE." 2^1 

trade or commercial exchanges, and are therefore indispensable as 
far as those exchanges may require. No other commodity of the 
world occupies this position, or discharges these functions ; and 
consequently, whenever money is wanting, in a greater or less 
degree, trade must be embarrassed. The doctrine of the Free- 
Trade theorists, therefore, is utterly false — false in principle, and 
ruinous in its application. Here is the origin of the difficulty 
which has led to so many calamitous results in the United States. 
The superficial thinkers among us, statesmen and others, who have 
adopted and advocated this doctrine, have never gone down to the 
bottom, nor back to its origin ; but they have received the dogma 
ex cathedra^ and propagated it, without understanding it. There 
are certain clap-trap bubbles, floating on the surface, which reflect 
beautiful colors, and seem very captivating ; and these are the only 
i objects which the common teachers of Free Trade see, and to 
which they direct the attention of the public ; but they never dive 
down, nor take the trouble of angling, to fish up that which swims 
in the deep sea. It is not too much to aver, that they neither know 
what they say, nor whereof they affirm; and that their triumph — 
so far as they have had any — is the triumph of ignorance. They 
have yet to learn, scientifically, the first principles of economy; 
for it is nothing more nor less than a question of economy. If 
they had understood the fundamental doctrine of their masters, 
why did they not begin there? They have never- mentioned it, 
and probably never thought of it. It is the doctrine that money 
and a piece of cloth are the same thing ; that they occupy the same 
position, and that there is no difference between them, in their 
influence on the operation of commercial exchanges ; and that it 
is of no consequence, whether we have one and none of the other, 
or much of one and little of the other. Had our own Free-Trade 
statesmen, and other of our teachers of this school, begun here, 
and thought upon it as much as the importance of the subject 
demands, it is possible they might have been startled. But they 
have adopted a faith without scrutiny, and attempted to propagate 
it without knowing what it is ; and we can hardly expect the com- 
pliment of an acknowledgment from them, if their eyes should 
chance to fall upon these pages, that we have told them what they 
never knew before, though, peradventure, it might be true. We 
will, however, venture to say, that they will agree with us so far, 
that money is the great power of the world, and that the party 
which has none of it is weak. They will, moreover, admit that 



232 MONEY AS THE 

there is such a practical virtue as ECONOMi-, in contriving to have 
money for necessary uses. We do not wish them to admit any 
more ; for in this admission, they have abandoned both the ground 
and the principle of Free Trade. A system of public economy, 
contrived to retain in the United States money enough for its neces- 
sary purposes, virould be a protective system. And no one, surely, 
will pretend that our trade can go on well, when there is not 
money enough in the country to keep it a going. 

We do not want -a better rule of public economy on this point, 
than M. Say himself has given against himself, that is, against his 
leading doctrine, in the following words: " The use of gold and 
silver in the peculiar character of money is proportionate to the 
quantity of moveable and immoveable objects of property that 
there may be to be circulated ;" that is, transferred in sale, as 
*' immoveable objects" can not be " circulated." In this proposition 
is recognised, first, money as the instrument of trade, in its '* pe- 
culiar character," M. Say's 'peculiar mode of expression ; and 
next, that the " proportion" required, in any nation, must be suf- 
ficient to accomplish the exchanges, without embarrassment for 
want of it. This is precisely the doctrine we hold to. M. Say 
also admits that "money is the vehicle of value. Its only use is 
to convey into your hands the value of the produce, which the 
purchaser of your goods has sold in order to purchase them ; and 
to convey, in return, into his hands, the value of the produce, 
which you have already sold to others." Again : " The com- 
modity employed as the material of money, is the agent of ex- 
change." Could anything be more explicit, more clear, or more 
to the point of our argument, that money is the " tools" of trade? 

It is not less remarkable that we find even Professor Twiss 
just where he should be on this point : " The money of a country," 
he says, " will be that part of its capital which is exclusively em- 
ployed in facilitating the exchange of other portions of its capital, 
just as the loom of the weaver, or the saw of the carpenter, are 
portions of the capital of a nation, employed in facilitating the 
production of clothes and dwellings ;" and yet Professor Twiss 
maintains that it is no harm to sell these tools. 

M. De Boisguillebert, a French economist under Louis XIV., 
proscribed by that prince fd* his opinions, said : *' Wealth consists 
in the continual exchange of the surplus which one individual 
possesses, for the surplus which another possesses ; and the moment 
the means [money] of effecting this exchange are wanting, a coun- 



MONEY AS THE "TOOLS OF TRADE." 233 

try becomes distressed in the midst of abundance." And Profes- 
sor Twiss says of this very writer, that "De Boisguillebert had a 
clear appreciation of the distinction in the separate employment of 
silver, as money, and as a commodity, and that, when it was em- 
ployed as money, it was not employed productively, and the reverse 
when employed as a commodity." 

Again says Mr. Twiss : " The money of an individual is part 
of his circulating capital, and he can only derive a revenue from it 
by parting with it ; but the money of a society has more the char- 
acter of a fixed capital, as a greater revenue accrues to a society 
from its use as an instrument for facilitating exchanges at home, 
than from exchanging it as an article of commerce with foreign 
countries. For instance, the first division of articles in which 
capital is fixed, according to Adam Smith, consists of ' all useful 
machines and instruments of trade, which facilitate and abridge 
labor.' Now money is most useful to a nation as an instrument 
for facilitating exchanges, and abridging the tedious operations of 
barter ; and as, by such exchanges, the production of national 
revenue is indirectly stimulated, and the result is an augmentation 
of produce, it seems, in its character of money, to be rather a por- 
tion of the fixed capital of a country ; more particularly as the 
waste of it requires to be made good from the circulating capital." 

It is admitted, that money is not wanted for any other purpose 
but trade, and that it would be a waste to have more -than this ob- 
ject requires ; but this is a very important object. It is vital to a 
system of public economy, and depends on measures of public pol- 
icy. As every private person, engaged in trade, is obliged to take 
care that he has money enough in hand or at command, for his pur- 
poses, so is it equally necessary that a nation should use this care. 
Neither can afford Free Trade. The farmer must keep up his 
fences ; and every person must defend the rights of his position, 
commercially, in relation to all the world around him, or he will 
be defrauded and cheated at all points. No one should spend more 
than he can afford. It is equally necessary for nations to guard 
their commercial rights, and be economical, as for individuals. 
Every nation stands in similar relations to other nations, commer- 
cially, as do individuals to those about them. If either should 
cease to exercise, or relax their care, in these respects, their rights 
would instantly be invaded, and they would suffer injury. Free 
Trade is preposterous. 

Mr. Jacobs says : " It may be observed, that the world is verjr 



234 MONEY AS THE "TOOLS OF TRADE." 

little really richer or poorer, from the portion of metallic wealth 
that may be distributed over its surface. . . The only benefit to 
the world in general, from the increase of these metals, is, that it 
acts as a stimulus to industry." 

The first of these remarks is very sensible, natural, and in one 
sense true, though it needs explanation; but, as much as we respect 
Mr. Jacobs, and feel obliged to him, for his incomparable work on 
the history of the precious metals, we must say, that the second is 
somewhat in the dark, though we acknowledge there was a founda- 
tion even for that. What he doubtless means by the first remark, 
is true, viz., that the wealth of society does not so much consist in 
the precious metals, and in money, reckoning their actual amount, 
as is commonly supposed. He says elsewhere, that " the gold and 
silver of a country can scarcely amount to one hundredth part of 
its wealth." We go even farther than that. But though money is 
but a small fraction of the wealth of a country, so small that it is 
hardly worth counting, for its comparative amount, yet it occupies 
a very important position as the "tools" of its trade; and those 
portions of the precious metals which are appropriated to other pur- 
poses, being generally three or four to one of the money, occupy a 
still more important position as the foundation of the value of money. 
These two considerations impart to the precious metals, in all their 
forms, a high, even a momentous importance. They seem to be 
as much a Providential provision for man, and for the necessities 
of society, as the laws of nature, and it is hardly too much to say, 
that they do in fact constitute one of those laws. They certainly 
grow out of them, and their uses have that foundation. Gravitation 
has no more power over its own sphere, than the precious metals 
have in theirs, and is scarcely more beneficent in its domain, than 
the latter. Man can no more dispense with the precious metals, 
than creation can with one of its great laws. 

We hold, therefore, that the second remark above cited from 
Mr. Jacobs, is derogatory to the precious metals, and detracts not 
less from their importance, than from the dignity of their position 
in the social state. We think we clearly see the light, or rather 
the darkness, in which he stood, when he made it. It is no dero- 
gation from his merit as an indefatigable and successful investigator 
in the line of his pursuit, to suppose, that he could not make every 
acquisition possible to man, and that he had not well considered 
the ground he occupied in this remark, or the things which it com- 
prehended. If, by ♦* a stimulus to industry," he meant only the art 



MONEY AS THE "TOOLS OF TRADE." 23D 

and labor bestowed on those portions of the precious metals which 
are appropriated to other uses than that of money, as is quite prob- 
able he did, judging from his Free-Trade views, he has certainly 
circumscribed himself to a very narrow field — not narrow in itself, 
for it is a broad one — but narrow as compared with that which he 
did not survey, and which is by far the richest and most important, 
viz., the sway which gold and silver wield over human affairs, and 
over the destiny of man, as the instrument or "tools of trade." If 
he had seen and appreciated this, it is not conceivable, that he 
could have made so derogatory a remark, " The only benefit," &c. 

Like all the Free-Trade economists, Mr. Jacobs says : " Gold 
and silver" — we cite his own words — " are merely commodities ;" 
and like them, we understand him as holding to the doctrine of 
equivalents in exchanges. And yet he says : " During the whole 
of this reign, [of Henry VII.,] trade had increased both in imports 
and exports ; and as the latter regularly exceeded the former, a 
great increase in the deposite of the precious metals, either in the 
form of coin or of bullion, must have taken place in this kingdom." 
Here, in the first place, he has granted all we ask, on the question 
of the balance of trade, in recording an historical fact ; but how, as 
a Free-Trade economist, asserting that money occupies the same 
position as other commodities in trade, is " merely a commodity," 
and that in all trade the exchanges are equivalents, he could make 
the exports exceed the imports, is more than we can see. 

It has already been seen, in the current of our argument, that, in 
consideration of the undeveloped resources of this country, of the 
enterprise of its population, and of the high value which money has 
always sustained here, as compared with its value in Europe and 
other foreign parts, it is scarcely possible for us to have too much 
of it. It is generally supposed, that eighty millions of cash, or 
specie, is necessary for our domestic exchanges and common busi- 
ness purposes. This is used many times over, and some portions 
of it may pass through hundreds of hands, in the course of a year.* 
It has been estimated that more than four hundred millions of dol- 
lars are annually required for the movements of the domestic 
trade of the country alone. Eighty millions of specie, therefore, 

•Since writing this chapter, we have been told of a case of fact, well certified, 
in which a man, with $1,000 capital, traded to the amount of $100,000 in twelve 
months. Is not money the " tools" of trade ? Without this cash, none of this 
business could have been done. How emphatically does this fact illustrate the im- 
portance of cash to a nation, and the misfortune, the incalculable disadvantage, of 
having too little — of having it driswn away by Free Trade to foreign parts. 



236 MONEY AS THE 

as the basis of a currency required by all the business and trade of 
the country — more especially as a large fraction of this, perhaps 
nearly a moiety, is itself a part of the currency — may be consid- 
ered a small enough supply for all demands. Prooably one hun- 
dred millions, for present population and business, in an ordinary 
state of things, would be more convenient. There is no use in 
having more cash in the country than its business or trade requires, 
as more would be idle. But that amount is important — is indis- 
pensable for the convenience and prosperity of the people. Its 
chief function is to constitute the basis of the currency, the bulk 
of which is always paper in a civilized, active, commercial commu- 
nity. But the cash, or specie, must be in the country, in abeyance 
to demand ; else the currency is unsound, being irredeemable. 

Nothing but the protective policy can keep the necessary amount 
of specie in the country. This is evident from what is elsewhere 
proved. " History is prophecy." The past proves what the 
future will be. There never was a time of no duties, as under the 
confederation ; or of low duties, as for the few years previous to 
the tariff of 1824, and previous to that of 1842 ; when the specie 
did not leave the country, and the currency break down. The 
reason is, that low or anti-protective duties always run the country 
in debt to foreign parts, by buying more than is sold ; and no for- 
eign balances against the country can be setded, except by cash, 
weighed in the scales. Consequently, the specie is required, and 
must go ; and unless the banks suspend, to stop it, it must continue 
to go, till these balances are setded. One hundred millions of bal 
ances of this kind against us, would at any time drain the country 
of a sufficient amount of specie, to distress and embarrass it; and 
without an extension of credit, it would probably take all the specie. 
But the commercial history of the country demonstrates, that a short 
period of low, anti-protective duties, will run up more than a hun- 
dred millions of balances against us. That is the reason, and the 
sole reason, of all the currency troubles of the country, in times past.* 

* Such was the distressing effect of the absence of specie from the country, or 
of the want of " tools" of trade, in consequence of low duties, just before the 
tariff of 1842 came to the rescue, that in some parts of t\\e interior of Pennsyl- 
vania, the people were obliged to divide bank-notes into halves, quarters, eighths, 
and so on, and agree, from necessity, to use them as money. In Ohio, with all her 
abundance, it was hard to get money to pay taxes. The sheriff of Muskingum 
county, as stated by the Guernsey Times, sold at auction one four-horse wagon, at 
$5.50; 10 hogs, at 6j cents each ; 2 horses (said to be worth from $50 to $75 each), 
at $2 each ; two cows, at $1 each ; a barrel of sugar, for $1.50 ; and a " store of 
goods" at that rate. In Pike county, Mit^souri, as staled by the Hannibal Journal, 



MONEY AS THE "TOOLS OF TRADE." 237 

A man of business, in a sound state, as to his own private finan- 
ces, can not fail, if he should try, so long as he does not buy more 
than he sells. It is the same with a nation. Having once in its 
bosom cash enough for its business, or trade, domestic and foreign, 
it will always have enough, till it begins to buy of foreign parts 
more than it sells to them, take the foreign trade as a whole. Then 
the cash must go, to settle balances, whatever be the amount. If 
they be equal to half of the specie in the country, then half of it 
must go ; if equal to the whole, the whole must go ; or the debts 
must be protested, or be arranged ; in any case, if the whole does 
not go, the debts must remain unpaid. 

The foreign debts of the United States are probably at this mo- 
ment more than three times as much as the amount of specie in the 
whole country ; and they were all created in times of low duties, 
and by reason of them. But those whidh were not settled by pri- 
vate bankruptcy and state repudiation, thus returning home from 
inability or bad faith, have been arranged, and the nation pays, 
through the debtors, from twelve to fifteen millions annually, in the 
shape of interest, with the principal hanging over its head. It is so 
much foreign debt against the country ; and if justice be done, the 
interest must always be paid.* 

the sheriff sold 3 horses, at $1.50 each ; 1 large ox, at 12| cents ; 5 cows, 2 steers, 
and 1 calf, the lot, at $3.25; 20 sheep, at J3| cents each ; 24 hogs, the lot, at 25 
cents ; 1 eight-day clock, at $2.50 ; a lot of tobacco, 7 or 8 hogsheads, at $5 ; 3 
stacks of hay, at 25 cents each ; and 1 stack of fodder, at 25 cents. This is but 
an epitome of the general state of the country at that time, arising from this cause, 
though some parts suffered more than others, as those above named. 

* After the bank of the United States was wound up, as a national institution, 
by the refusal of a new charter, the states were stimulated, by the action of the 
federal executive, to the creation of a host of banks without a specie basis, and to 
extravagant expenditures for internal improvements. From 1820 to 1830, during 
the existence and action of the national bank, only 22 state banks were erected, 
with an aggregate capital of only $8,000,000; whereas, between 1830 and 1840, 
392 banks, or 571, including branches, sprang into existence, with a nominal cap- 
ital of $213,000,000. (See House Document 1 1 1, 2d Sess. 26th Congress.) A large 
portion of these banks, being unnaturally forced into being, without any solid foun- 
dation, failed of course, in the commercial revulsion that followed. 

The history of the state debts shows, that from 1820 to 1825, the increase of state 
bonds was $12,000,000; from 1825 to 1830, the increase was $13,000,000; from 
1830 to 1835, when this unnatural stimulant began to operate, the increase sud- 
denly rose to $40,000,000; and from 1835 to 1840, it was $109,000,000, nearly 
the whole of which was issued in 1835 and 1836, before the destruction of general 
credit. The imports of 1836, tempted by the same seductive influences, under a 
system of low and falling duties, were $61,000,000 in excess of the exports; and 
the home speculations and adventures, prompted by this cause, were on the same 
scale of extravagance. All these state debts, or nearly all, went abroad to satisfy 
the commercial balances, which were heaping up against the country. 



2S8 MONEY AS THE "TOOLS OF 

But the nation has never run in debt to foreign parts, under the 
existence and action of a protective policy ; and it has never paid 
any foreign debts except by that policy. Such are the facts. It is 
not intended to say, that no foreign engagements have ever been 
met, under a system of low, anti-protective duties ; but only, that 
foreign engagements, in the aggregate, have never been liquidated, 
but always increased, under that system ; and that the aggregate 
has only been lessened, and credit revived only, under the action 
of a system of protective duties^ 

Moreover, the currency can never fail, will always be sufficient, 
and can never be unsound, under an adequate system of protective 
duties. Nothing more is meant here by the term, adequate^ than 
that the system shall be strong enough to prevent foreign commer- 
cial balances accumulating against the country ; and it is supposed, 
that a tariff based on the principles of that of 1842, and as a whole 
equally protective, will be sufficient. It is also supposed^ that the 
legislation for the regulation of the currency, shall be ordinarily 
prudent and effective. A bank, here and there, might fail, from 
mismanagement, or other cause ; but such an event, rarely occurs 
ring, could no more disturb or impair the general system, than the 
failure of a merchant, in the city of New York, could shake the 
commercial fabric of this great emporium. So long as no foreign 
commercial balances are accumulating against the country, the spe- 
cie in it would remain as the basis of the circulating medium, and 
a part of it. And the small balances in favor of the country, annu- 
ally accruing, as under the tariff of 1842, showing that the country 
is selling more than it buys, would gradually enlarge and fortify 
the basis and body of the currency. It could neither fail, nor be 
insufficient, nor unsound, any more than a private individual could 
fail, who has once started strong, and never buys more than he sells, 
but always sells more than he buys. All the money, and more too, 
would be in the country — would always be here; and therefore 
the currency would always be sound, and must remain so. All the 
talk about overtrading, and about the alternate inflations and con- 
tractions of the currency, has arisen entirely from, and only applies 
to, a state of things, which the want of a protective system brings 
about. 

As to inflations and contractions of the currency, they are all 
produced by changes in the policy of government. Banking is 
trading in money, and the same principle of self-preservation con- 
trols this branch of trade, as all others. It will not commit suicide. 



MONEY AS THBt " TOOIiS OF TRADE." 2S9 

as would be the case, by a voluntary sacrifice of the confidence of 
the public. Nor will it voluntarily do an injury to that public, on 
whose prosperity it depends for all its profits of business. It would 
be absurd to suppose it,, because it is a moral impossibility. It is 
only the irresistible pressure of a superior power, that of govern- 
ment, which leads to such results as sudden and violent contractions 
and expansions of bank issues. 

It is true, indeed, that this view of this subject, presents quite a 
different aspect to that portion of our history, from 1830 to 1840, 
when compared with that which was forced upon the public at the 
time, by men in power, who charged all the fault of those expan- 
sions and sudden contractions of the currency to the banks. It 
was the fault of the government exclusively, consisting in the fitful 
fluctuations of its policy, and in having adopted a plan of Free 
Trade. The banks accommodated the people when and as far as 
they could. That was called an inflation or expansion of the cur- 
rency ; but when the government, by its policy, forced them to 
diminish their discounts and issues, which crippled business and 
trade, that was called contraction. 

All the currency troubles of the country, all bank suspensions, 
all bank troubles of a serious nature to the wide community, all 
insufficiency and unsoundness of the circulating medium, and such 
like, have occurred only in the absence of a protective policy of 
the government over the commercial interests of the people. Sitch 
is history. It is, therefore, fair to say, that these troubles come iii 
consequence of such defect. If it had been only once, or twice, or 
three times, the evidence would be less strong. But it has been 
many times, without a single exception to the nde. 



240 PAPER-MONEY AND BANKING. 



CHAPTER XVL 

PAPER-MONEY AND BANKING. 

The Principle of Credit— The United States built up by Credit.— Gold and Silver a Credit 
Currency. — Is Bank-paper Money? — The Invention of Paper-Money a great Advance 
in Civilization. — Facts to illustrate its Economy and Necessity. — It greatly augments the 
Facilities, Scope, and Powers of Commerce. — Facts and Authorities to this Point. — 
Banking the Instrument of Paper-Money — The American System of Banking. — Prin- 
ciples and Benefits of Banking. — Adam Smith's Doctrine that Paper-Money banishcB 
Specie, not applicable to the United States. — The Precious Metals the only sound Basis 
of Banking — The visionary and unsettled Opinions of European, particularly British 
Economists, as to the Basisof Banking.— Sir Robert Peel right at last in his Bill of 1844. 
— A Government Bank necessarily in a false Po.sition. — The Subtreasury a Government 
Bank. — Treasury-Notes are Post-Note.s. — All the Functions of the Treasury, by making 
it a Government Bank, merged in that Bank — The Effects, Danger, and Power of this 
Institution. — It subverts the Banking Sy.stem of the Country. — The Instincts and Propen- 
sity of the Federal Government for Banking, as illustrated in the Subtreasury. 

As we are now approaching that department of the monetary- 
system, which has much to do with the principle of credit or faith, 
it may be well to say a few words on this great bond of the social 
state. Endeavors have been made to scandalize credit, by represent- 
ing it as synonymous with faith reposed in false pretences ; and on 
the basis of this assum^ption, a theory has been set up, that credit 
is a vice, and ought not to be tolerated. This doctrine was first 
promulgated from the most eminent civil position in the land ; and ' 
the unearthly scream, the barbarian whoop of a servile minion, to 
the great affright of men less mad, sitting in grave assembly in the 
halls of legislation, gave out the word, " Perish credit !" This is 
a libel on humanity, and on virtue. The great benefit and blessing 
of Christian civilization, is the increase and strengthening of faith 
among men ; and not the least important ramification of this virtue, 
is commercial credit. There may be too litde ; it is impossible 
there should be too much of it. Its prevalence and growth are 
proof of a sound state of public morality. 

It was by credit, or a sound state of public morality — which is 
the same thing — that the United States rose from their small be- 
ginning to their present magnitude. Commercial credit was one 
of the most important elements of society during our colonial his- 
tory ; for there was very litde money. Public faith of this very 
kind, was the great secret of our success in the revolutionary war ; 



PAPER-MONEY AND BANKING. 241 

for money which we had not, or credit which is the same thing, is 
the sinews of war. It was commercial integrity which carried the 
nation through the years of the confederation ; for there was no 
money to begin with, and we were constantly running in debt. On 
the verge of dissolution as a political body, on account of commer- 
cial embarrassments, it was credit that saved us at the time of the 
adoption of the federal constitution. It was the revival of credit 
by the establishment of a national bank in 1791 , that gave us a new 
start ; but there was very litde money in the country. It was the 
vital power of the credit of that institution, which carried the nation 
onward in a career of prosperity for twenty years ; and in the mean- 
time, state banks arose in various parts of the country, apparently 
diffusing a beneficent influence. But the war of 3 812, and the 
non-existence of a national bank for four or five years, brought us 
into commercial troubles again. But credit came to our aid, a new 
national bank was chartered in 1816 for twenty years more, and 
but for the want of an adequate protective system for a few years 
previous to the tariff of 1824, which sent the specie out of the 
country, there would have been uninterrupted prosperity. It was 
credit that carried the nation through that trial, and raised it again 
to unexampled commercial vigor, under the tariff of 1824, and on- 
ward, till the low duties of the last years of the compromise tariff 
of 1833, again drew off the precious metals, and doomed the nation 
to start again on credit. From the beginningof our Jiistory, down 
to this time, credit has been the soul, and the great power of the 
nation ; and no people on earth are more indebted to this virtue. 
There must always be a substantial ground for credit; or else it 
can not flourish. That ground is public virtue — moral integrity. 
It hardly need be said, that all public measures which nourish 
credit, secure its foundations, surround it with safeguards, and build 
it up a glorious temple, in any community, constitute one of the 
most important and effective elements of public economy. 

We proceed to observe, that gold and silver, used as money, 
officiate in two representaUve capacities, one representing the joint 
values of these metals in all the uses to which they are applied ; 
and the other representing every species of property of a commer- 
cial value, in its character as the recognised currency of the world, 
in the way of expressing that value, and in consummating commer- 
cial exchanges. It is the first of these representative functions 
which we have occasion now to notice, for the purpose of reviving 
a statement before made, viz., that gold and silver, used as money, 
16 



242 PAPER-MONEY AND BANKING. 

are a mere credit currency, representing all the values arising from 
the great variety of their uses ; and their credit is based upon these 
values, their value as money being but a fraction of the whole, 
itself borrowed from these other values. It is certain, as before 
shown, that they never would have been used as money, but for 
their other values; and therefore, as money, their credit may be 
said to be based entirely upon them. 

Our object in making this idea prominent here, is to show, that 
money, in all forms and substances, is a credit currency, and de- 
rives its credit from considerations extraneous to itself. There is, 
owever, a substantial advantage in favor of gold and silver, as 
money, arising from the fact, that they are imperishable parts of the 
great masses of the same substances, always worth their weight for 
any of the great variety of uses which constitute their value, and 
are capable, at any time, of being put back into those uses. This 
is what is commonly called intrinsic value. The gold and silver, 
contained in money, are, confessedly, substances which have a 
value in themselves for other uses, equal to their weight. Never- 
theless, when employed as money, they rest on the basis of that 
credit which they derive from their adaptation to other uses. These 
values are sufficient to constitute gold and silver, in the form of 
money or bullion, an adequate basis for a secondary currency, if 
the interests of the public and of trade require it. 

Some deny, that a paper medium is money ; others even deny, 
ihat it is a currency. The second appears to be the denial of a 
fact ; and the principle, as we suppose, on which the first denial is 
made, viz., because bank paper is no more than a representative, 
would also prove, that an eagle and a dollar are not money; for, ais 
before shown, they also are mere representatives. But it is not 
much matter what things are called, if we are understood ; and 
those names are doubtless best, in the use of which we can be best 
understood. Bank paper, passing for money, is commonly called 
money, and that is enough to justify a conformity to usage. 

Assuming that no paper-money ought ever to be in circulation, 
which is not good for the amount in specie, whenever demanded 
by the holder ; and that no institutions for such issues should be 
authorized, without being obliged to conform to this rule, it may 
be said, that the invention of paper-money, on such a basis, has 
proved scarcely of less importance to society than that of a metallic 
currency. Each was a great advance in civilization. So incon- 
venient is the primitive mode of barter, that, even where the 



PAPER-MONEY AND BANKING. 243 

^precious metals are wanting, men but little removed from barba- 
jism, can not be induced to return to it ; but they will substitute 
something for a common currency, which always has a market 
value for exportation, by which gold and silver, in some foreign 
country, can be realized, thus recognising and establishing the 
great principle of a specie-basis. In California, hides are said to 
be the common currency, and though inconvenient, the basis is as 
valid as that of the best paper-money in the United States or in 
Europe, because, being in demand, they will be redeemed in the 
way of trade. These hides discharge the functions of money, 
are money, and have a value in themselves as truly as gold and 
silver. The adoption even of such a currency is a great improve- 
ment on the mode of barter. But the adoption of a gold and sil- 
ver currency, or its substitution for barter, was a convenience to 
society, the measure of which can hardly be estimated. 

Before gold and silver had become a universal medium, con- 
venience and necessity, in ancient times, and in some countries, 
forced men to invent common mediums, to escape from barter. 
Homer says that the armor of Diomede cost nine oxen. The 
Abyssinians have used salt as money, because it was scarce and 
precious. In Newfoundland, dried cod were once used as money, 
and in Scodand, nails. In some parts of India and Africa, shells 
have performed this function. The legal currency of Lacedaemon 
was iron, and of the early Romans, copper. We hear of a variety 
of other currencies among barbarians. All these, and many other 
examples, indicate how strongly nations and tribes were and have 
been pressed by convenience and necessity, to agree on a common 
currency, before gold and silver had got into general use, as such. 

But since the adoption of silver and gold as a currency, some 
portions of the world have advanced so much and so far in the 
modes of civilization, that an improvement on a metallic currency 
became as necessary to meet the exigencies of the commercial 
world, as that improvement on the system of barter. Good and 
important as a metallic currency was, when first invented as a sub- 
stitute for barter, in process of time — when faith between men 
grew with the growth of civilization, to a high value, and when 
great expedition was required, in frequent and large exchanges — 
a metallic currency became an obstacle, an impediment to the ma- 
chinery of the commercial world, not to the same extent, but some- 
what in the same manner, as barter was before it. It was incon- 
venient, unwieldy, gross, and as such, incapable of those quick 



244 PAPER-MONEY AND BANKING. 

and large operations between remote points, which the state of 
society and of the commercial world required. The invention of 
paper-money was equally natural, and equally necessary to the 
improved state of society in which so much business was required 
to be done, on the principle of faith, under proper forms and se- 
curities, as originally was the invention of a metallic currency as 
a substitute for barter. It became impossible to do the business 
of the commercial world without it ; and it is found scarcely less 
convenient in the ordinary transactions of trade, than in the larger 
operations of commerce. 

The following facts will show how utterly impossible it would 
be to do the business now required, with a metallic currency. The 
receipts and payments of six banks, in the city of New York, on 
a specie basis of $3,000,000, from the 1st to the 10th of Decem- 
ber, 1846, were more than $60,000,000, with an actual use of l^ss 
than $200,000 of specie for the whole amount; or with less than 
$20,000 of specie a day, for average transactions of $10,000,000 
a day. There were, at the time, 23 banks in the city. What 
amount of business the remaining 17 did, in the same ten days, 
we are not informed. 

As instances of the comparative expense of making exchanges, 
between remote points, by specie and paper mediums, or through 
banks and a metallic- currency system, the following facts are suf- 
ficiently instructive : In the operation of the subtreasury, the gov- 
ernment of the United States paid $3,950, in November, 1846, 
for the remittance of $503,000 in cash, from New York to New 
Orleans ; and in December, following, $9,000 for remitting 
$1,300,000 in cash, from the same city to the same; whereas, 
other remittances, about the same time, amounting in all to 
$1,669,314, from New York to New Orleans, through the agency 
of banks, cost the government — 0. During the existence of the 
bank of the United States, all the banking business of the govern- 
ment, averaging some twenty millions a year, cost — 0. The trans- 
fer of specie, between the United States and Great Britain, costs 
at least 3^ per cent., or $35,000 for every million. 

Besides the risk and expense of transactions of commerce with 
gold and silver, between remote points — remote as many of the 
above-named transactions of the New York banks — it would have 
been impossible to do but a small fraction of the above business 
of $60,000,000, with gold and silver, in the same time, even if 
the parties were all in New York. Experience is the same in all 



PAPER-MONEY AND BANKING. 245 

parts of the commercial world, and with all parties concerned in 
trade. Men would no more consent to go back to a pure metallic 
currency, than they who had once experienced the benefits of such 
a medium, would have consented to go back to the mode of trade 
by barter. The invention of paper-money is not, perhaps, so 
great an improvement on an exclusive metalHc medium, as the lat- 
ter was on barter ; but it is too great a convenience to all parties, 
in ways that will occur to every man's experience, whether doing 
much or litde business ; whether receiving or transmitting by mail 
or otherwise, five dollars, or a hundred, or thousands, or tens of 
thousands, on a piece of paper, which, if lost by the way, is yet 
no loss ; or whether he be travelling, or sleeping in his own house, 
and would feel insecure with specie in his charge, but perfectly 
sale with a piece of paper, equally good, and payable only to his 
oraer, or with a bank-note, payable on demand, concealed from any 
search but his own ; and withal, it is such an immense saving of 
time and expense, such economy, that it will never be abandoned, 
till men are more inclined to go backward toward barbarism, than 
to advance in civiHzation. 

Brande's Dictionary, of which M'Culloch was an assistant editor, 
and who doubtless wrote the article on money, says : "The use 
of a metallic currency is accompanied by a heavy expense ; and 
there is a much greater difficulty in effecting payments by the 
agency of coins, than one might at first be disposed to believe. 
If the currency of the United Kingdom consisted wholly of gold, 
it would certainly amount to at least 60 millions sterling, the ex- 
pense of which, allowing J per cent, for wear and tear, and loss 
of coins, could hardly be estimated at less than three millions [ster- 
ling] a year. [Under the head of banks, this cost is stated at 
^3,250,000 a year.] But [even] this heavy expense is really a 
far less serious obstacle to the exclusive use of the precious metals, 
than their weight, and the trouble and expense attending the car- 
rying them about. . . Hence it is, that all commercial nations en- 
deavor to fabricate a portion of their money of some less valuable 
and more portable material than bullion ; and hence, also, the ori- 
gin of bills of exchange, checks, and other devices, for eco7iomizwg 
the use of money." Jacobs, speaking of the condition of things 
as far back as in the 12th century, also says : *' The risk and ex- 
pense of conveying it [metal-money] to a distance were still more 
powerfully opposing obstacles. Hence arose the invention of bills 
of exchange." 



246 PAPER-MONEY AND BANKING. 

But one of the most important effects resulting from the use of 
paper-money, is its influence in augmenting the amount of trade, 
and as a consequence, of wealth. Banking is the necessary in- 
strument of paper-money, without which, under proper regulations 
of the public authorities, it can not be issued with adequate secu- 
rity to all the parties concerned. A banking system for every coun- 
try, should be the creation of a most careful and wise legislation, 
watched with a supervision and guarded with penalties corre- 
sponding with the importance of the interests involved. Banking, 
like all human institutions, is liable to be abused ; but the abuse 
of a thing is not conclusive evidence of its inutility. The wreck 
of banking institutions in the United States, as is now generally 
perceived, has been rather the effect of the political action of the 
government, than of any tendency inherent in the system ; ajad 
the result of all this experience is, the establishment of banks on 
a footing, and with securities v*'hich better deserve and generally 
receive the public confidence. There are very few of the hun- 
dreds of chartered banks in the country, now in operation (1847), 
the paper of which is not received without hesitation, and with 
entire trust. They are the chief reliance for the currency of the 
country, and must necessarily be so. It is, therefore, a matter of 
great importance, first, that the banks should be held under proper 
guards against abuse; and next, that their legitimate operation, in 
supplying a sound and adequate currency, should not be embar- 
rassed. 

Banking, in all countries, is necessarily based on like principles, 
as the objects everywhere are similar. In the United States, how- 
ever, the necessity of augmenting a currency usually, almost always, 
defective in amount, as compared with the demands of trade, has, 
perhaps, been more urgent than in European countries. Hence 
the temptation to excessive issues, and the necessity of adequate 
provisions of law to check and hold them in restraint. The con- 
ditions of bank charters are devised with special care to secure 
this end, at the same time that this species of trade — for banking 
is trading in money — is allowed an extent commensurate, as near 
as possible, with the wants and security of the public. That secu- 
rity can only be made good by conditions which shall confine the 
circulation of banks within the limits of their ability, under all exi- 
gencies, to redeem their paper when offered. Their credits are 
legitimate, only as they are based on their stock, deposites, and cir- 
culation ; the first of which is firm and reliable ; but the other two 



PAPER-MONEY AND BANKING. 24T 

are precarious, the management of which constitutes the chief task 
of bank financiering. It demands experience and vigilance. 

The usual mode of banking in the United States has been through 
the agency of corporate companies ; but the state of New York has 
recently authorized private banking, by requiring deposites of public 
funds with the comptroller as security, and the comptroller's stamp 
on all such private issues as a method of inspection and control. 

No system of banking can stand, except as the notes are al- 
ways payable on demand, in legal tender, that is, specie. They 
who prefer the paper, for convenience, are usually many to one 
of those who want the specie. The chances and probabilities of 
calls for specie are obliged to be well considered by the bank, so 
that it may not be taken by surprise, and its issues are regulated 
accordingly. By this means, the country is usually supplied with 
ah amount of currency, two or three times in excess of the precious 
metals in the vaults or at the command of the banks, with safety 
and profit to all parties, so long as the system is executed with 
fidelity ; and by the same means the business and trade of the 
country are augmented in a corresponding degree. None can fail 
to see, that this is, and ever has been, a great blessing to the 
people of the United States, and the means of increasing their 
wealth, and consequently the power of the nation, to an incalculable 
amount. 

The following extract from a work recently published in Lou 
don, under the title of " Lectures on the History and Principles 
of Ancient Commerce, by A. W. Gilbart," will serve at the 
same time as an illustration of this subject, and as an expose of the 
principles of banking. 

" The banker who first makes advances to the agriculturist, 
the manufacturer, or the merchant, in his own notes, stimulates as 
much the productive powers of the country, and provides employ- 
ment for as many laborers, as if, by means of the philosopher's 
stone, he had created an amount of gold equal to the amount of 
notes permanently maintained by him in circulation. It is this 
feature of our banking system that has been most frequently as- 
sailed. It has been called a system of fictitious credit, raising the 
wind, a system of bubbles. If it be a fictitious system, its effects 
are not fictitious ; for it leads to the feeding, clothing, and employ- 
ment of a numerous population. If it be a raising of the wind, it 
is the wind of commerce, that bears to distant markets the products 
of our soil, and wafts to our shores the productions of every 



248 PAPER-MONEY AND BANKING. 

climate. If it be a system of bubbles, they are bubbles which, 
like those of steam, move the mighty engines that promote a 
nation's greatness, and a nation's wealth. 

" Thus a banker, in three ways, increases the productive power 
of capital. First, he economizes the capital already in a state of 
employment. Secondly, by the system of deposites, he gives em- 
ployment to capital, that was previously unproductive. Thirdly, 
by the issue of his own notes, he virtually creates capital by the 
substitution of credit. The means which a banker possesses of 
granting facilities to trade and commerce, will be in proportion to 
the amount of these three sources of capital. If his own capital 
amounts to ^100,000, and the deposites in his hand to ^100,000, 
and his notes in circulation to ^100,000, he has then at his 
command the sum of .£300,000, with which he may discount bills 
to his customers. But if the public say to him, we will take your 
notes no longer, give us gold, he will issue gold, but he must re- 
duce his discounts from £300,000 to .£200,000. If the depositors 
also demand the return of their deposites, he must reduce his dis- 
counts from £200,000 to £100,000, the sum raised by deposites 
being again rendered unproductive in the hands of the owners, and 
that raised by the circulation of notes being altogether annihilated. 

"Banking promotes the prosperity of a country, chiefly by in- 
creasing the amount and efficiency of its capital. Jn the history of 
commerce, we find no piinciple more firmly established than this : 
that, as the capital of a country is increased, agriculture, manufac- 
tures, commerce, and industry, will flourish ; and when capital is 
diminished, these will decline. The man who attempts to annihi- 
late any portion of the capital of the country in which he dwells, is 
as forgetful of his own advantage as the miller who should en- 
deavor to dry up the mountain-stream which turns the wheels of 
his machinery, or the farmer who should desire to intercept the 
sun and the showers which fertilize his fields." 

Adam Smith was clearly of opinion, that paper-money aug- 
mented trade and commerce. He says : " When paper is sub- 
stituted in the room of gold and silver money, the quantity of the 
materials, tools, and maintenance, which the whole circulating capital 
can supply, may be increased by the whole value of gold and silver 
which used to be employed in circulating them. The whole 
value of the great wheel of circulation and distribution, is added 
to the goods which are circulated and distributed by means of it. 
. . I have heard it asserted that the trade of the city of Glasgow 



PAPER-MONEY AND BANKING. 249 

doubled in about fifteen years after the first erection of the banks 
there, and that the trade of Scotland has more than quadrupled 
since the first erection of the two public banks at Edinburgh." It 
is true he does not make banks the sole cause of this increase of 
trade ; though he seems to think it the greatest. 

But Adam Smith assumes, that a paper medium banishes from 
the country an amount of the precious metals equal to the amount 
of paper in use ; that is, as we suppose, equal to the excess of 
paper above the specie deposites ; and that this specie, thus gone 
abroad, is employed in foreign commerce, as capital of the country, 
from w^hich it goes ; and consequently, that the external trade of 
that country is enhanced in proportion to the amount of specie thus 
disengaged from domestic uses. There might have been some 
reason for this theory, in Adam Smith's time ; and it may still 
have some truth in it, in the same quarter. But the great error 
of Adam Smith and his school, is, that they are ever deducing 
general principles from isolated facts, and insisting on their appli- 
cation everywhere. 

Practically, it does not seem probable, that paper-money in the 
United States ordinarily has the effect to banish the precious 
metals, to any considerable extent, if at all, because the objects of 
banking here are rather for domestic than for foreign purposes. 
Money will of course be employed where it is worth most ; and it 
has happened, down to this time, to have been always-worth more 
in the United States, than elsewhere, since we have been a nation. 
The American banking system was not established solely, nor 
chiefly, for economy in the machinery of the circulating medium 
— which is the reason assigned by Adam Smith — but its main 
design is to supply a defect of that medium. This being the 
principal object, there is no natural reason why the existence of a 
paper medium should banish the precious metals, although, to 
some extent, their absence might, perhaps, better be afforded. 
But, so far as they are withdrawn from circulation, it is not to 
employ them abroad, but to hold them in deposite, in the bank 
vaults, as a basis of the paper medium. A balance of trade against 
the country, that happens for want of an adequate protective sys- 
tem, may tend to draw them off, and will naturally do so. But 
they ought not to be liable to such a draft, nor does it enter into 
the design of the American banking system, that they should go 
abroad. When they begin to go, through the influence of the 
above-named cause, it is a just subject of concern, and will 



2G0 PAPER-MONEY AND BANKING. 

naturally be the occasion of what is called bank contraction, which, 
if the draft continues, under large foreign demands, is liable to end 
in bank suspension. 

The principle, therefore, laid down by Adam Smith, is im- 
properly asserted by him to be a general one. Certainly it does 
not apply to the American System. This only proves what we 
have occasion to maintain throughout this work, that, although 
some of the principles of every system of public economy, may 
be and are common to all systems, there can be no common sys- 
tem equally applicable to all nations, or to any two nations. Every 
nation — and none more than the United States — is obliged to 
legislate on some principles, vitally, radically, and fundamentally 
different from some of those which are equally important to other 
nations. 

It will be seen from what has been advanced in this and in the 
three preceding chapters, that we do not consider it possible to 
base a circulating medium on anything but the precious metals. 
Nevertheless, it would seem, that the world has not even yet done 
with trying other modes, or at least advocating other principles. 
Lamartine, who has been put forward as a leading statesman in the 
French Republic of 1848, speaking of the French assignats, in his 
history of the Girondists, says, "Une monnaie n'a jamais d'autre 
valeur que celle de la convention qui I'a cree. . . La loi seule 
pent frapper monnaie. . . Comment I'etat qui represente la fortune 
et le credit de tous, ne frapperait-il pas une monnaie du papier aussi 
inviolable et aussi accreditee, que celle de simples citoyens?^' 
He maintains that the want of credit in the assignats was a mere 
fatuity, the result of popular caprice and habit ; and as above, that 
law can make money at any time. This power would certainly 
be a great convenience to the French republic, in its present em- 
barrassed finances, one month after its birth. 

The celebrated Englishman, Law, who once had so much in- 
fluence on this question in France, maintained, that money ought 
not to have any intrinsic value ; and the whole English nation, states- 
men, economists, and all, with a few exceptions, were led entirely 
astray, by a supposed state necessity, during the suspension of the 
bank of England, from 1797, running on for about a quarter of a 
century. It is true that a committee of the house of commons, in 
1809, brought in an orthodox report, to wit, that gold had not 
risen, but that the paper of the bank of England had depreciated; 
but the house, for stale purposes, instantly reversed this decision. 



PAPER-MONEY AND BANKING. 251 

to maintain the credit of the bank. They doubtless voted against 
their convictions and their conscience, thinking that the state of the 
kingdom required it ; and to this day the economists and statesmen 
of Great Britain have scarcely emerged from the obscurity into 
which they were then plunged. Observe what M. Say puts forth, 
and into what an error he was led, in view of this very spectacle, 
to wit, the suspension of the bank of England: — 

" The very singular state of the actual money of England, and 
the extraordinary circumstances that have occurred in respect to 
it, have given a decisive proof, that the mere want of an agent of 
circulation, or, of the commodity, money, is sufficient to support a 
paper-money, absolutely destitute of security for its convertibility, 
at a high rate of value or even at a par with metal, provided it be 
limited in amount to the actual demand of circulation. . . Sixty 
millions of paper [English bank paper], though destitute of in- 
trinsic value, are, by the mere want of a medium of exchange, 
made equal to 1,284,000 lbs. weight of gold, or 1,200,000,000 
lbs. weisrht of susrar." 

*' Ricardo," says M. Say, " whom I look upon as the individual 
in Europe the best acquainted with the subject of money, both in 
theory and in practice, has shown, in his proposal for an eco- 
nomical and secure currency, that, when the good government of 
the state may be safely reckoned upon, paper may be substituted 
for the whole of a metallic money." 

But hear Ricardo himself, in view of the same state of things: 
" It is not necessary that paper-money should be payable in specie, 
to secure its value ; it is only necessary that its quantity should be 
regulated according to the value of the metal which is declared to 
be the standard." 

As the government had authorized the suspension of the bank 
of England, decreed that gold had risen, and that bank-paper had 
not fallen, the public creditor, in 1810, was obliged to take bank- 
of-England paper at par, when ^56 in paper would purchase only 
^£46 14s. 6s. in gold ; that is, he was defrauded of Ij ounces of 
gold in every 12 ounces, the latter of which was his due. 

But Great Britain which, by an assumed state necessity, had 
been led so far astray in her doctrines regarding a monetary system, 
during the long suspension of the bank of England, has been com- 
pelled to abandon that ground, and by Sir Robert Peel's bill of 1844, 
after having been so long driven about by delusive theories, landed 
at last on the true cash or metallic platform. This bill is described 



252 PAPER-MONEY AND BANKING. 

by Professor Twiss as follows : " The bank charter act [Sir Robert 
Peel's, 1844] provided, that there should be an absolute limit to 
the amount of notes issued upon securities, such an amount being 
taken as would keep the currency at par with foreign countries, 
according to past experience. It combined a further provision for 
an expansion of the currency to suit the convenience of commerce 
upon a basis that should preclude the depreciation of it; namely, 
by allowing an unlimited issue of notes upon buHion." But, pity 
to say, in 1847, another assumed state necessity compelled a 
temporary suspension of this salutary measure. 

Nevertheless, the world now generally understands and believes, 
that nothing but a basis composed of the precious metals, exchange- 
able on demand, will sustain a circulating medium in full credit. It 
is remarkable, however, that the economists and statesmen of Great 
Britain are behind all the rest of the world in this particular, proba- 
bly on account of the residuary influence of the doctrine decreed by 
British statesmen, to answer the supposed necessities of the empire 
during the long suspension of the bank of England. They evi- 
dently waver, and look upon Sir Robert Peel's bill of 1844 as a 
problem. Professor Twiss so regards it. Another imaginary state- 
necessity may possibly bring them back to the same old ground 
again. For the state must be maintained at all hazards, and by 
any expedients whatever. 

It was a mistake, however, to suppose that an expedient of this 
kind sustained the credit of the bank-of-England notes. The de- 
cree of parhament had not an item of influence in this particular. 
It cheated nobody but the public creditor, by forcing him to take 
10| ounces of gold for 12. All who traded in money at that 
period estimated the comparative values of gold and of bank-of- 
England notes, by the same rules which determine all commercial 
values, and dealt in them accordingly. The same rules governed 
those who exchanged money for other commodities, and other com- 
modities for money. Gold in all such cases bore a premium of 
the difference between itself and bank-of-England notes. The 
public creditor suffered alone. 

. Such is always the result in all cases of bank suspension. The 
notes go immediately into market, and the market price, as esti- 
mated by the precious metals in the scales, determines their value. 
That the bank-of-England notes did not fall lower than 90 on a 
100 during the long suspension, prove simply and that conclusively, 
that, in the market, there were 90 grains of faith to 10 grains of 



A GKDVERNME NT-BANK. 253 

diffidence, as to the probability of redemption in cash. Such is 
the invariable law applied to uncurrent or irredeemable money 
when exchanged for specie. The suspension of a bank does not 
prove it insolvent. It may be perfectly sound. But it impairs its 
credit, and depreciates its paper precisely by the measure of con- 
fidence it has lost. The precious metals never rise or fall in price 
except in their values for use, either as money or for other pur- 
poses ; and the scales are their only measure. And the price of 
gold and silver, or of any money for use, as before shown, is not 
the entire sum, but the 3, or 5, or 10, or any other per cent, given 
for such use ; whereas, when money is exchanged for other com- 
modities, in other words, is discharging the proper functions of 
money, not as the subject but as the instrument of trade, then the 
entire sum is the price. 

Banking by government is liable to several very manifest evils 
and perils, one of the most prominent of which — especially in a 
republican community, where public officers are frequently changed, 
and scarcely ever selected for their financial abilities — is, that the 
government, even if qualified by a knowledge of the subject, has 
enough else to do, and can not do justice to this. The history of 
banking in all countries, not less than the first glance of so difficult 
a business, teaches that it requires the undivided attention of those 
who have it in hand. To be duly qualified, a man should be ed- 
ucated, trained to it, by long service in its practical operations, as 
an apprenticeship. The greatest hazard of all for a government 
to set up banking, in its own proper capacity, is the temptation to 
trade in the public credit. Money-brokers may do this legitimately ; 
but that the government itself should do it, in banking, as a part 
of its banking capital, is one of the most alarming features of the 
case. After all the experience of the world, it ought to be con- 
sidered as a settled question, that no paper should ever be au- 
thorized as a common currency, which is not founded on a specie 
basis, and which is not redeemable on demand by specie. 

Take, for example, the Independent or Subtreasury, in connexion 
with the power to issue treasury-notes, which vests in the same de- 
partment, and which can not, therefore, be separated from its func- 
tions, and it is a bank, with every faculty of banking except that 
of discount, which is not essential to banking. The treasury of 
the United States, by the Subtreasury law, is constituted into a 
bank, and the authority to make loans and issue treasury-notes, on 
no other foundation than credit, is merely an extension, by separate 



2&4: A GOVERNMENT-BANK. 

acts, from time to time, of the powers of the same institution or 
agency^ for it can not be said there are two agencies in the case, 
or two separate responsibilites. There is only one. Treasury- 
notes, therefore, as a part of the action of such an institution, are 
merely another name for the post-notes of a bank, which are always 
objectionable in a banking institution, because they indicate weak- 
ness, and the necessity of credit. Let this bank go on, and issue 
-its post (treasury) notes, from year to year, by tens or twenties 
of millions, in excess of its specie basis, the public revenue ; 
the latter decreasing as the former augments ; and is it not trading 
on credit in banking operations ? The credit of the United States 
is usually good — always when the public finances are well managed 
— but it is never beyond the reach of a shock. The post (treasury) 
notes of this institution, and its drafts, are liable to constitute mil- 
lions of the circulating medium of the country, and to present the 
anomaly of a currency constantly fluctuating in value. It is never 
at par, except in transitu from above to below, or from below to 
above. iVnd whenever this government-bank shall have ventured, 
in its trade on credit, to the breaking down of its credit — which is 
a supposable, possible, and perhaps not improbable case — where 
and what will this currency then be ? The perfection of a banking 
system is, that the value of its notes to the holder should have no 
other cause of fluctuation than the distance they may have travelled 
from the bank's counter, being always redeemable there. It is a 
remarkable fact, that the notes of the old bank of the United 
States did not depreciate even by this cause, and Were rarely below 
par, often at a premium, in the remotest parts of the world, as in 
China. But the currency of the present (government) bank, that 
is, of the United States treasury, does not remain at the same rate . 
of value scarcely for a single day, simply because it is based on 
credit, which lies at the mercy of the bulls and bears of the stock 
market, all depending, not on capital, but on the conduct of the 
agency of the bank itself. Public credit, in its own proper position, 
is well enough. But it was never made for banking, but rather for 
the speculations of stock-jobbers, whose appropriate field it is. 

But, there are other lights, in which, for the practical purposes 
of the commercial world, this government-bank claims to be viewed. 
It has some formidable horns of power upon its head. It can not 
but be seen that seizing upon and taking in charge the specie of 
the country, by withdrawing it from the vaults of the state banks — 
there being no other but these — and locking it up in the vaults oi 



SUBTREASURY. 

a treasury-bank, created by federal legislation, for this purpose, is 
a very essential, direct, and positive interference with the banking 
business of the country, inasmuch as gold and silver are the only 
legitimate basis of banking, and inasmuch as when these are taken 
away, all the power of banks for usefulness, on the American 
system, in the supply of a currency, is broken down. In such a 
case they can not issue to the extent designed, and which the neces- 
sities of the public may require, except by a fraudulent act. It is 
immaterial, so far as the principle, and so far as positive mischief 
is concerned — except merely in the amount of the latter — whether 
this effect be entirely sweeping and comprehensive, so as to shut 
up the banks ; or only partial, to embarrass their operations, and 
thereby to prevent their supply of an adequate currency for the 
business and trade of the country. It is certain, that, if the federal 
government claim and exercise the right of drawing into its vaults 
thirty millions of specie a year, in a time of peace, and fifty or a 
hundred millions in a time of war, it must necessarily have nearly 
or quite an entire control over the banking institutions of the coun- 
try, to contract their issues, and thus to embarrass trade, and crip- 
ple the commercial operations of the people. The Subtreasury is 
compelled to rely on the bank-vaults for its supplies, as the specie 
of the country is not tangible in large amounts anywhere else, so 
that, virtually, and in every practical effect, under a treasury-bank, 
of this description, all other banks subsist for its accommodation, 
and not for the accommodation of the business public, of the peo- 
ple, for which latter purpose they were undoubtedly created. In 
the most prosperous times, and for a season, both may go on to- 
gether without great inconvenience. But the moment there is a 
pinch, the Subtreasury draws on the banks, and the banks of neces- 
sity curtail their credits and call in their dues. They are pinched 
by the Subtreasury, and all engaged in trade — what man, rich or 
poor, has not an interest in trade? — all so engaged are pinched by 
the banks, not as a fii*st, but as a secondary cause. The banks are 
compelled to this course by the operation of the Subtreasury. 
Thus, when the trade of the country wants money the most, it 
gets it the least. It is wrested from the business public by the all- 
absorbing Subtreasury demands. Instead of having three dollars 
of currency for one of specie in the bank-vaults, as is usual in 
prosperous times, the business public can only have one dollar, 
when they want three more than they ever did. They are pinched, 
they are distressed, arid thousands come to ruin by this single cause; 



256 A GOVERNMENT-BANK. 

tvhereas, if the banks were not compelled to refuse discounts, and 
to call in their debts, by the action of the Subtreasury, they would 
and could accommodate the business public, and, peradventure, 
save the country from a commercial revulsion. 

Nor is it a sufficient answer to say, that this specie all comes 
back again from the Subtreasury, by the disbursements of the institu- 
tion. Some of it may come back, to be taken out again in the same 
way ; but it will not accommodate the business public, which com- 
prehends all persons, in every condition of life, even the poorest, 
who will feel a pressure of this kind much quicker than the rich. 
Besides that the secretary of the United States treasury, under this 
law, always has his hand on the banks, and is ever thrusting it into 
their vaults, he has continually in his charge and under his control, 
a sufficient amount of specie — rarely, if ever, less than millions, 
often tens of millions — the want of which, as a basis of the com- 
mon currency, is sufficient, at any ordinary time, to embarrass trade 
and cripple commerce. The importation of specie, in large amounts, 
from Europe, in 1846-'47, in consequence of short crops there, 
which relieved the money-market of the United States, and enabled 
the country better to bear the operation of the Subtreasury, was a 
providential qvent which, in the case of good crops in Europe, can 
not be relied upon. Such extraordinary events would be alike an 
imprudent basis of legislation, as of confidence for the future. 

What, for example, will be the state of things, when our foreign 
exchanges shall be reversed, and specie begin and continue to flow 
out of the country, as must, sooner or later, be the case? Even 
under this extraordinary influx of specie, the banks were obliged to 
keep an eye on the demands of the Subtreasury, rather than on the 
wants of the business public. They could not in prudence enlarge 
their issues, by extending their credits, because they were ever lia- 
ble to have their paper presented for specie by the agents of the 
government-bank, who were continually drawing upon them by 
their paper already out ; so that the people were not only barred 
from getting money, as they might want for business, as "tools" of 
trade, but they were constantly being deprived of what they had. 

This government institution, therefore, thus becomes an inter- 
fering power with the banking operations of the country, to disturb 
and embarrass them, and to hold the banks in such a constant state 
of uncertainty, as to the demands that may be made upon them for 
specie, that they really exist, under such a system, not for the ac- 
commodation of the business public, for which they were designed ; 



SUBTREASURY. 257 

but for the accommodation of the officers and for the uses of the 
federal government, for which they were not designed. The effect 
is to subvert the banking system, to disappoint its aims. Thirty 
millions of specie, in a time of peace, and sixty millions or more in 
time of war, are annually drawn into the vaults of the Subtreasury, 
part as revenue, and part as loans ; and the vaults of the banks are 
the only places where this specie can be obtained. Thus, in a time 
of scarcity of the precious metals, the banks can not issue money 
for the business public ; for if they do, the operation of the Sub- 
treasury might at any moment render them liable to drafts on their 
vaults, so as to force them to suspend ; not because they are insol- 
vent, and have not assets for all demands ; but because there is a 
lack of specie in the country. To avoid this result, they can not, 
in prudence, at a time of money pressure, and under the operation 
of the present United States government-bank, venture on issues 
of paper in excess of their specie deposites ; nor usually even to 
that amount. The very time when the business and trade of the 
country would be most cramped, and even distressed, for want of 
money, Is the time when the natural operation of the Subtreasury 
would greatly aggravate that distress. For example, there was 
not specie enough in all the banks of the country, that could pos- 
sibly have been spared, to answer the necessities of the government 
in 1847, independent of the extraordinary importations from Eu- 
rope, for the reason above named ; and it is as certain, as figures 
can make It, that, if Providence had not smitten Europe with famine, 
we should have been smitten, by the operation of the Subtreasury, 
in 1847, with a widespread bankruptcy, from the effects of which- 
the government itself could not have escaped. 

But a mere subversion of the banking system, by such a meas- 
ure, is not the worst effect. It becomes a positive tax, a heavy 
burden to the people, in many respects. It is a tax in reducing 
and rendering insufficient the circulating medium. A thing that 
is not, and never has been, can not be exactly measured. A man 
may know and feel, that he has been deprived of a great contingent 
benefit, by being deprived of the means of acquiring it, though he 
may be unable to estimate exactly the amount of his loss. But if 
it were a benefit to which he was entitled, and being robbed of it, 
the deprivation is a tax, unjustly imposed, to the amount or value 
thereof, whatever that may be. In this way, all the contingent 
wealth of which the people of the United States may at any time 
be deprived, by the operation of the Subtreasury, in subverting the 
17 



258 A GOVERNMENT-BANK. 

banking system of the country, reducing the circulating medium 
when it is most wanted, embarrassing trade, and circumventing 
commerce, is a tax — and a tax, which, if it could be told, would 
be startling. But the positive expenses of the machinery of this 
treasury-bank are more palpable, and constitute no inconsiderable 
tax. To this should be added the risk and cost of transporting 
specie from one point to another, examples of which are presented 
on page 244. 

But the people may well ask, why should the federal govern- 
ment have this power? Is not the currency, which is good enough 
for us, good enough for them? What is this government of the 
United States? Is it not flesh and blood, as we are? Does it not 
eat, drink, wear clothes, and live in houses, as we do ? Are not 
its wants the same as ours, and will not the same things satisfy them ? 

This, indeed, is rather a singular spectacle presented by the peo- 
ple and government of the United States, in their relations to each 
other. It might well be said, if the currency of the country was 
good, why was it not good enough for the government? And if it 
was not good, what reason can be given, why the government should 
be better served than the people, all at the expense of the people ? 

But there is something more in this treasury-bank, than an inter- 
ference with, and a subversion of the banking system of the coun- 
try, in the manner and to the effect above described — something 
more than the tax of supporting it. There seems to be an instinct 
in the federal government, which teaches it, that it can not be dis- 
vorced from banks. It has, therefore, stolen one of the worst kind, 
and set it up in a shape to have it pass for a NO-bank. It was made 
by those who had unmade the old bank, and being professedly com- 
mitted to a NO-bank system, yet finding they could not do without a 
bank, they were forced to get up an anomalous institution. But it is 
a bank, as we have seen — a government-bank — a bank of deposite, 
and a bank of issues. Certainly it is a bank of deposite ; and that it is 
a bank of issues, look at its paper, going the rounds of the country 
to the amount of tens of millions, as a currency. Is not that a bank? 
It would seem, that the federal government can not, by any possibil- 
ity, keep its hands off of banking ; and that, when it professes not 
to have one, it gets one with a vengeance. An open and frank 
assertion of the right of banking, as derived from the constitution, 
would be, not only more honorable, but more safe, than to disclaim 
it with the breath of the mouth, and usurp it with the hand of power. 

Besides the commercial evils of the Subtreasury bank, monopo- 



SUBTREASURY. 259 

lizing the precious metals, in a time of scarcity, as already indica- 
ted, there are no limits to the political power of such an institution, 
in the hands of the national executive, to subvert the liberties of the 
country. It is a union of purse and sword, such as was never even 
dreamed of by the most sagacious vaticinations of the far-seeing 
framers of the government. It is a power not only to control the 
currency, while professing to have nothing to do with it, but to draw 
into its hands all the gold and silver of the country, to pass through, 
only in such a way, and for such purposes, as may please those 
who have charge of it. It is absolute power, and may be used at 
will. If it does not, at some future day, perpetuate the will of one 
man, and impose it on the country, for ages, perhaps for ever, it cer- 
tainly will not be for want of ability, with such an engine of power 
in his hands. 

With the evidence which we now have of the tolerable adequacy, 
of the state banks to furnish a currency, there could be no urgent 
necessity for the re-establishment of a national bank, unless the 
state of things brought about by the operation of the Subtreasury 
system, should create that necessity in its abrogation. That the 
state-bank system will be materially unhinged, and its operation 
more or less deranged, by the Subtreasury, can not but be certain. 
The federal government, by this measure, has resumed the powers 
of banking with a stronger hand than ever, and instead of doing it 
by proxy, through a corporation with limited powers, it has taken 
the business into its own charge, with unlimited powers, and made 
a treasury-bank. In falling back from this high-handed measure, 
it may be a question, as to where will be the best stopping-place, 
and whether the state banks, after such a derangement, will be fully 
competent, and well fitted, to discharge the functions which they 
might, perhaps, otherwise have done. It is an instinctive quality, 
and a natural right, in every nation, to regulate its own currency, 
by the national authorities, and it may well be doubted, whether it 
can ever be properly done, without such an elevated supervision. 
The return of the federal government to banking, in the Subtreasury 
mode, is proof of its propensity that way; and when the Subtreasury 
can no longer be endured, to remedy the evils which it shall have 
created, it may possibly be found necessary to readopt the usual 
mode of all nations, which has been approved by universal experi- 
ence. Certainly, it will never be pretended by those who have 
made the treasury-bank, that there is no banking power in the fed- 
eral constitution. 



CHAPTER XVII. 

THE GAIN OF INDIVIDUALS NOT ALWAYS THE GAIN OF THE 

COMMUNITY. 

Views of Pree-Trade Economists on this Point. — M'Calloch's View of Capital as formed 
out of Profits. — M'Culloch's Hobby. — The Doctrine of Equivalents in Trade considered. 
— Equivalents in Kind. — Money, as " Tools of Trade," not an Equivalent in Kind. — How 
this affects the Doctrine of Free Trade. — Difference, economically, between Importations 
for Consumption of Value, and Importations to be improved in Value or otherwise used 
for Increase of V7ealth. — The Values added to the raw Material by manufacturing. — 
Every Commercial Transaction independent. — Answer to some Points made by M. Say. 

The Free-Trade economists aver, that, as the wealth of a na- 
tion is composed of the aggregate wealth of all the individuals in 
it, whatever an individual gains, the nation gains. We propose to 
show that this rule is often false. 

M'Culloch has well and truly shown, that, as a general rule, the 
profits of producers of value, are the measure of increasing wealth, 
as follows : — 

" That capital is formed out of profit, and that profit is itself the 
surplus obtained from industrious undertakings, after the produce 
expended in the carrying them on has been fully replaced, is a prop- 
osition, which, though universally true, is at variance with the com- 
mon notions on the subject. Instead of supposing profits to origi- 
nate in the manner now stated, they are almost uniformly supposed 
to depend on the sale of the produce, and to be made at the ex- 
pense of the purchaser. Thus, to take a familiar instance, the hat- 
maker who sells a hat for thirty shillings, which costs him twenty- 
five shillings outlay, believes himself, and is universally believed 
by others, to have made the five shillings of profit at the expense 
of the individual who bought the hat. In truth and reality, how- 
ever, he has done no such thing. He produced, in a given time, 
a hat equivalent to or worth, in silver, thirty shillings, while the 
various expenses necessarily incurred in its manufacture, only 
amounted to twenty-five shillings. But, then, it must be borne in 
mind, that, speaking generally, the various individuals who deal 
with the hat-makers, are placed in the same situation : the farmer, 
the clothier, the boot-maker, &c., are all making the same profits, 
in their respective businesses ; or, in other words, they are all pro- 



261 

ducing quantities of corn, cloth, boots, &c., equal to thirty shillings, 
by an outlay of twenty-five shillings. It is clear, therefore, that, in 
exchanging the precious metals for accommodation, or in exchan- 
ging one sort of commodities for another, the one party gains noth- 
ing at the expense of the other. Profit is, in all cases, the result 
of more being produced in a given period, than has been consumed 
in that period. The introduction of exchanges would not be ad- 
vantageous, if it merely enabled one set of individuals to prey upon 
some other set. This, however, is not the effect. By enabling la- 
bor to be divided, it gives individuals the means of employing them- 
selves, in preference, in some one pursuit, and consequently causes 
commodities to be produced and distributed in the best and cheap- 
est manner ; but it does nothing more. 

*' If the populai opinion with respect to the source of profits 
were well founded, it would inevitably follow — inasmuch as they 
take for granted that all producers make their profits at the expense 
of some one else who buys their commodities — not only that no 
additions could be made to capital, but that the capital now in the 
world would be very soon annihilated. If such were really a cor- 
rect view of the circumstances under which mankind are placed, 
our lot would be anything but enviable. Happily, however, this 
is not our situation. The produce of the labor we exert, during 
any given time, is almost always greater than the produce we are 
obliged to consume during the same time, and the surplus or profit 
being accumulated, becomes, in its turn, an instrument of vast 
power, and adds prodigiously to the productiveness of industry. 

" It is clear, therefore, that there is no class of industrious indi- 
viduals who live at the expense of any other class. The retail 
dealer, for example, is in no respect more indebted to his customers, 
than they are to him. It is not his, but their own, interest that they 
have in view, when they resort to his shop. Society is, in truth, 
as M. Destutt Tracy has remarked, nothing but a continued series 
of exchanges." 

As a general rule, or, as M'Culloch himself says, in the above 
citation, "generally speaking," and as the development of a princi- 
ple, not unimportant, but often useful in application, this reasoning 
is excellent, and the doctrine sound. It shows how wealth in- 
creases, and the only way in which it can increase, in direct oppo- 
sition to first-sight notions or popular opinion. But Mr. M'Culloch 
is always so anxious to draw everything into the vortex of his Free- 
Trade theorv, that he is rarely contented to let well alone. In ail 



262 EQUIVALENTS IN EXCHANGES. 

his writings, on every topic, in a dictionary of commerce, or what- 
ever he is about, he is sure to be seen on this hobby. It seems to 
be a mental disease with him. He could not even finish the above 
excellent argument, without winding up with the absurdity, that 
*' full equivalents are always given for whatever is received in ex- 
changes." It was because he had his eye on trade between na- 
tions, and was afraid, either that this principle of equivalents in 
exchanges would be forgotten in that application ; or that some 
one would presume to think or say, that it does not apply there ; 
or because he thought proper to anticipate the application. We, 
certainly, shall have no controversy with Mr. M'Culloch, or any 
one else, for all that this principle is worth to them, in either do- 
mestic or foreign exchanges. We will concede to them the prin- 
ciple beforehand, for the sake of argument, and give them all the 
advantage of it, though we do not believe in it. We grant, then, 
that "full equivalents" are rendered, from side to side, in exchanges 
between nations. The question at issue between Free Trade and 
a Protective System, does not fall within the scope of this proposi- 
tion ; but it lies in the kinds of equivalents passed, and in the rela- 
tive proportions of the kind called money. 

But let us see whether these exact equivalents, asserted by Mr. 
M'Culloch, with so much concern about another question not in- 
volved in this after all, are exactly true. It is not, perhaps, very 
material for the augmentation of general capital, whether bargains 
are always equal or not; but unequal bargains are so common, that 
most persons will very readily believe, that they constitute the great 
majority. But except as they afford those who get the best bar- 
gains an undue advantage over those who have the poorest, and 
impair the position of the latter most essential to public wealth, it 
is not easy to see why the principle of Mr. M'Culloch, so well elu- 
cidated above, so far as the general augmentation of capital is con- 
cerned, does not apply to unequal as well as to equal bargains. The 
design of trade, doubtless, is the exchange of equivalents, though 
it rarely happens with perfect exactitude. No matter. Where it 
is not a cheat, both parties are accommodated, obtain a profit, and 
general wealth is enhanced. 

It makes no difference to the nation, in domestic trade, when 
one party gives money in exchange. It is supposed that he ob- 
tained the money by some other commodity sold at a profit on the 
cost of production, and the profit is a fraction of the money paid in 
such a case. In the rounds of domestic trade, therefore, thouoh 



EQUIVALENTS IN EXCHANGES. 263 

exact equivalents are rarely exchanged, Mr. M'Culloch's principle 
of increase of wealth by exchange, holds good. But his eagerness 
to anticipate and decide another question, enticed him into the fault 
of asserting what every one knows is not true, viz., exact equiva- 
lents in exchanges. 

Nor will we, as before intimated, insist on Mr. M'Culloch's giv- 
ing up what he has seized upon without right, truth, or logic, even 
in application to foreign exchanges. Let him have it. We grant 
him that equivalents are exchanged in foreign trade, as long as it 
can honestly be carried on. When bankruptcy or suspension 
comes, of course the equivalents are suspended. 

The question between us and the Free-Trade economists, is, 
about equivalents in kind. If they will be content to let us pay 
in kind, that is all we want. They reply, that they will allow us 
this privilege ; but they say, at the same time, that money is an 
article in kind ; that it is one of the commodities in trade, and oc- 
cupies the same position as others ; and that it makes no difference 
with us as a nation, whether we pay money or corn. They say 
we get an equivalent, which we do not deny ; but we say it will 
be to our inconvenience, if we exchange our "tools of trade,'* so 
that we can not trade any more. Here is the point. They say, 
that money is nothing but a commodity, and that it makes no dif- 
ference with a nation, whether money or any other commodity be 
parted with in trade. We say, that money is more. than a com- 
modity ; that it is the instrument or " tools of trade ;" and that, in 
parting with these " tools," by an imprudent foreign commercial 
policy — as we necessarily must, from the position we occupy, 
without a protective system — we part with the means of trade, 
both doniestic and foreign, as effectually, as truly, and in the same 
manner, as a mechanic parts with his means of living, when he 
sells his tools. They say, there is no need of guarding these tools ; 
that they will take care of themselves ; that, if they go away, they 
will come back again, in the natural course of things. We say, 
that they will certainly go, unless taken care of (which they do 
not deny) ; that when a mechanic's tools are gone, he must stop 
work ; that he loses time, and suffers loss, till he can supply him- 
self again ; that, for these reasons, it is unwise to sell his tools, 
though he gets an equivalent ; that it may be a long time, and very 
hard work, for him to be well set up in his business again ; that, 
in the meantime, he will have lost all the wealth he could have 



264 THE GAINS OF INDIVIDUALS NOT ALWAYS 

acquired, if he had kept his tools, and been all the while at work 
with them. 

We have shown, that money is not an article in kind; that it is 
something more than a commodity ; that it is the instrument of 
trade, and as such, occupies a very different position from the 
commodities for which it is given in exchange ; that it discharges 
the same functions in the hands of a nation, in carrying on its trade, 
as do " the tools of trade" in the hands of a mechanic, in carrying 
on his work ; and that the effect would be the same for a nation to 
part with money, which it wants in trade, as for a mechanic to part 
with his tools. The difference between us -and our opponents, 
therefore, in 'these two opposite j^ositions, is vital and heaven-wide. 

From ih'is digression on equivalents in exchanges — as to the 
principle of which we have no controversy with Mr. M'Culloch 
and those of his school, but assent to it — let us return to the con- 
sideration of their proposition, that, as the wealth of a nation is 
composed of the aggregate weahh of the individuals in it, whatever 
an individual gains, the nation gains. 

Generally speaking, in domestic exchanges, this is true ; but not 
always. A robber, or a cheat, gains by his depredations. Is the 
community benefited ? A man, in domestic trade, has made a 
good bargain, entirely at the expense of the second party, as some- 
times, not unfrequenlly, happens. Is the general wealth increased? 
But nothing is more common, or better known, than that bargains 
are made, and trade consummated, every day, in which one party 
gains and the other loses ; and frequently when all the gain of one 
party is the measure of loss to the other. Generally, however, it 
is admitted, as Adam Smith and others assert, that two values, 
composed of the profits of each party, are added to the public 
wealth, in domestic exchanges; whereas, in foreign trade, if profit- 
able to both parties, only one value, and that a mere profit in trade, 
is added to home capital. Hence, other things being equal, every 
domestic exchange is equal, in the augmentation of domestic cap- 
ital, to two foreign exchanges ; and it need not be said, how much 
more frequent and less expensive domestic exchanges are. Hence, 
the greater importance of the "home-trade. 

But to proceed. The proposition of the Free-Trade econ- 
omists, is, that what an individual gains in foreign trade, the nation 
gains. There are two points on which this proposition fails, and 
is proved false as a rule, though it may sometimes be true. The 
first is, that they who have laid it down, make no distinction be- 



THE GAIN OF THE NATION. 2C5 

tween imports for the consumption of their values, and imports of 
permanent and increasing value, as the one class and the other, 
respectively, affect national wealth ; and the second is, that they 
do not distinguish between the gains of one party which are losses 
to others, or injuries to the public, and gains which do no harm to 
others, or the public, but are indifferent in their relative effects, or 
beneficial. 

A merchant panders to the appetites, fancy, tastes, and extrava- 
gant propensities of his customers — not to benefit them, but for 
his own profit. The Free-Trade economists say, that his cus- 
tomers get an equivalent. That they get a technical equivalent, 
we do not deny ; or we are willing to grant it. If a customer buys 
and drinks a gallon of brandy, or of wine, imported, not only the 
profit of the merchant, but the cost, is at the expense of the com- 
munity, unless it can be shown, that the community is benefited ; 
which would be very difficult. Allowing that the profit of the 
merchant stays in the country, it is no increase of its capital, but 
has only changed hands ; whereas, the brandy and wine being im- 
ports, the capital of the country is minus the cost, and is not aug- 
mented by the profit of the merchant. It is the same with cloths 
and with everything imported for the consumption of its value at 
home. The profits of merchants, in such cases, are no augmenta- 
tion of domestic capital ; and the cost, which is the principal part 
of the price, is so much subtraction from the capital of the country ; 
so that there is no gain, and apparently much loss. 

So long, however, as the country pays for these imports by ex- 
ports of its surplus products, and does not part with its money, with 
its " tools of trade," but employs its money at home to move these 
surpluses on to their foreign destination, and to distribute the im- 
ports received in exchange for them, then the profits of merchants 
are an augmentation of domestic capital ; as are also all the imports 
of a durable and useful kind, to be incorporated with the perma- 
nent capital of the country, or by such incorporation to render 
domestic capital more valuable and more productive ; but the cost of 
all that is consumed to the annihilation of its value, must be ranked 
with luxuries which the country can afford, and not with the 
materials of its wealth, or increased capital. It is really no aug- 
mentadon of wealth, any farther than the profits of the trade are 
concerned, notwithstanding that all these imports are technical 
equivalents. 

Although there is no loss, but some gain, so long as the money, 



266 THE GAINS OF INDIVIDUALS NOT ALWAYS 

of the country, or its " tools of trade," are not, but only its sur- 
plus products, are exported to pay for these imports, nevertheless, 
the gain of the nation would be much greater, and all the greater 
of the cost of these imports, so far as, by a protective policy, they 
could be produced at home, in exchange for the same products, 
provided they could be produced equally or more cheap ; and it 
has been elsewhere shown, that, whatever is produced at home, 
under a protective system, which could not otherwise be produced, 
is, generally, and in the end always, cheaper than the foreign prod- 
uct. Although, therefore, the imports received in exchange for 
surplus domestic products exported, may be technically called 
equivalents, and are an augmentation of national capital, so long 
as the nation's " tools of trade" are not required to pay for them ; 
still the national capital would be as much more augmented as the 
cost of all these imports that could be produced at home, under a 
protective system, it being supposed that their domestic production 
would consume the articles otherwise exported to purchase them. 

We are aware that the Free-Trade economists are ready on 
this point to say, and that they have said, that what you take off 
from home labor to produce these articles of manufacture — sup- 
posing them to be of this kind — under a protective system, you 
subtract from agriculture and other labor, and therefore lose what 
this labor would produce in those quarters; to which we answer, 
first, that the labor thus diverted, is but a small fraction of the labor 
of the country; and next, that the additional stimulant which this 
home market imparts to other departments of labor, is more than a 
compensation for this loss. American labor is so independent, that 
its power is never stretched to that ne jilus ultra of exertion, as in 
Europe, which the theory of this reply to us supposes; and it is 
capable, when prompted by interest, not only of filling up this 
vacuum, when created, but much more. This reply, therefore, 
can not answer its intended purpose, and our argument prevails, 
to wit, that the capital of the nation would be augmented to the 
full amount of the cost of these articles, so far as they could be 
produced at home under a protective system, notwithstanding that 
the exchanges with foreign parts are allowed to be equivalents. 
The home production thus saves to the country the cost of one of 
these equivalents, so that it realizes both. 

But when the nation buys of all foreign parts more than it sells 
to them of its own surplus products, and its cash, in other words, 
its "tools of trade," are put in requisition ^o settle balances, these 



THE GAIN OF THE NATION. 267 

exchanges, too, may be allowed to be technical equivalents. We 
concede this point. But there is one point claimed by our oppo- 
nents, which we can not concede, viz., that this gold and silver, 
these " tools of trade," thus parted with for imports, are mere com- 
modities ; that they occupy the same position in trade as the com- 
modities for which they are exchanged ; and that they are only 
subjects of trade. We allow, that they are commodities, but deny 
that they occupy the same position with others. They are instru- 
ments, '* tools," not subjects of trade, when they go to settle 
balances. 

But we are told that what the merchants gain in foreign trade, 
the nation gains. Go back to the disastrous period of 1836-'3'?. 
The merchants had for years been growing rich by excessive im- 
ports, tempting the people to buy and consume ; and the end of it 
all was a general bankruptcy. The very means by which merchants 
made princely fortunes, prostrated the nation. Yet, according to 
these Free-Trade economists, we had our equivalents, and were 
growing rich. Long, however, before the equivalents due from 
us were rendered, we were forced to stop payment, and fund the 
debt. Having lost our " tools of trade," we continued in a state 
of insolvency, and poor, till the tariff of 1842 enabled us to begin 
making new "tools," and to hammer away again to get out of 
debt. Still the Free-Trade economists say, there was no harm in 
our losing these " tools ;" gold and silver are nothing but commod- 
ities in trade ; we had our equivalents, and were growing rich all 
the while. 

We will not, therefore, consent to the imputation of denying 
that the whole is equal to its parts, when we say that the gains of 
individuals in foreign trade, are no certain evidence of the gain of 
the nation, and that a nation may be impoverished by the very acts 
which enrich some of its individuals. It must first be considered 
and determined whether these gains of individuals come from 
without or within the nation. If they come from without, the na- 
tion, other things being equal, is enriched ; if from within, it is 
Peter giving to Paul. The nation is not enriched, and may be 
impoverished. It is inevitably impoverished, if the price only 
passes from Peter, the consumer, to Paul, the merchant, that Paul, 
after retaining his profit, may remit the cost to the foreign producer, 
if that remittance is composed of the nation's "tools of trade." 

Doubtless the people of the United States can produce enough 
for all their necessities, without money, as their forefathers did, 



268 IMPORTS FOR CONSUMPTION OF VALUE 

under the British crown, and during the confederation. But wiL 
they be content? Have they not a right so to protect themselves, 
as to be able to have money enough circulating among them to do 
their business with ? It is vastly convenient and economical to 
trade with money, and not be forced back to barter. It is, indeed, 
the very purpose of money, to facilitate the operations of barter, 
and to abridge its round, till it becomes no round at all, so that a 
man who has money can always get the thing he wants, instead of 
being compelled to barter for it. But let the money of a com- 
munity go to pay its foreign debts, which it ought never to have 
contracted, and all is at a stand. 

^ But it is worth while to consider more particularly the difference 
/ between imports for consumption of their values, and imports of 
) permanent value, to be incorporated with the permanent or pro- 
ductive capital of the country, or to be worked over as raw mate- 
rials for the increase of its value by home labor; and to consider 
them, as they, respectively, subtract from or add to the capital and 
wealth of the country. All will be surprised, who do not know 
the fact, when told that the Free-Trade economists make no dis- 
tinction between imports for consumption of their values, and im- 
ports of permanent or increasing value, as the two kinds affect the 
wealth of a nation. 

Take, for example, the excessive imports into the United States, 
before the revulsion of lS36-'37, chiefly for consumption of their 
values, as $20,000,000 of silks a year, and such like, till, in 
1836, the imports exceeded the exports by $60,000,000. A large 
portion of these excesses of imports, may be assumed as consisting 
chiefly of articles for the consumption of their values, of which 
no quid fro quo could afterward be found. They went into the 
bellies and on the backs of an unwise and extravagant people, and 
the merchants made their fortunes by it. These goods could not 
have arrived at their destination without large profits ; and the doc- 
trine of the Free-Trade economists is, that the gain of individuals 
is the gain of the nation. It is by such doctrine, that the United 
States have repeatedly been brought to the verge of ruin, and more 
than once plunged into the abyss. 

But imports of permanent value, which constitute a part of the 
capital of the country, and imports of raw materials, to be worked 
over and upon for the multiplication of their values, occupy a very 
different position in public economy, from those the values of which 
are consumed in the use. The following history of a j;o?/?wZ o 



AND FOR INCREASE OF WEALTH. 269 

cotton, from an English paper, will illustrate the values added by 
manufacturing: "There was sent off for London, lately, from 
Glasgow, a small piece of muslin, about one pound weight, the 
history of which is as follows : The cotton came from the United 
States to London; from London it went to Manchester, where it 
was manufactured into yarn; from Manchester it was sent to Pais- 
ley, where it was woven ; it was sent to Ayrshire next, where it 
was tamboured; afterward it was conveyed to Dumbarton, where it 
was handsewed and again returned to Paisley, when it was sent to 
a distant part of the county of Renfrew to be bleached, and was 
returned to Paisley ; then sent per coach to London. It is diffi- 
cult precisely to ascertain the time taken to bring this article to mar-» 
ket, but it may be pretty near the truth to reckon it two years from 
the time it was packed in America till its cloth arrived at the mer- 
chant's warehouse in London, whither it must have been conveyed 
3,000 miles by sea, and 920 by land, and contributed toward the 
support of no less than 150 people, whose services were necessary 
in the carriage arid manufacture of this small quantity of cotton, 
and by which the value has been advanced 2,000 per cent. What 
is said of this piece, is descriptive of no inconsiderable part of the 
trade." 

The following is another extract from an English journal to the 
same point: — 

"The quantity of cast-iron worth £1 sterling, becomes worth the following 
sums^— 

When converted into ordinary machinery £4.00 

Large ornamental work 45.00 

Buckles— Berlin work -i-r-.^. .,660.00 

Neck chains 3386.00 

Shirt buttons 5896.00 

"The quantity of bar iron worth XI sterling, becomes, when formed into — 

Horse-shoe work £2.10 

Knives (table) 36.00 

Needles 71 .00 

Penknife blades 657.00 

Polished buttons and buckles 897.00 

Balance-springs of watches 50,000.00" 

The question with Americans is, whether these values, running 
up, in one instance, from 1 to 2,000, in another, from 1 to 5896, 
and in a third, from 1 to 50,000, shall be created at home, and re- 
main here as part of the capital of the nation ; or whether they shall 
be created abroad, and this capital be lost to us ? These are only 
tliree of hundreds of similar instances, involving, as the case may 



270 IMPORTS FOR CONSUMPTION OF VALUE 

be, the loss or gain of uncounted private and public wealth, to one 
side or the other. 

Many things are also imported as permanent fixtures in the 
means or instruments of wealth, which are of more or less, some 
of great value. Many of the mechanic and fine arts import their 
instruments, not obtainable at home. A great variety of imports 
are brought in as means of wealth. 

But the Free-Trade economists make no distinction between 
articles that are consumed in the using, and those which are em- 
ployed for the increase of wealth. It may be allowed, that all that 
is consumed to nerve the arm of labor, and make it more available, 
, and all that is consumed to make skill more productive, belong to 
the latter class ; and it may also be allowed, as it is undoubtedly 
true, that all the wastes and extravagances of those who can afford 
it, make more work and profit for the industrious and frugal. All 
private and public expenditures give employment to labor and art. 
But when we come to the question of the greatest national econ- 
omy, all these things are to be sifted, and well considered. It is 
evident that a nation may be losing on an immense scale, when, 
according to the doctrines of the Free-Trade economists, it is as- 
serted to be increasing in wealth. According to these doctrines, 
the United States were never doing better, never so well, as from 
1835 to 1840, when they were plunging headlong into general 
bankruptcy, where, as need not be said, they arrived, to the great 
sorrow and painful remembrance of all who lived in those times. 

As a farther illustration of the profit of manufactures to a nation, 
we would commend the following extract from Mr. Gilbart's 
" Lectures on Ancient Commerce" : — 

"All nations that become manufacturing nations, have become 
commercial nations ; and have, consequently, become wealthy. 
Manufacturing nations rise to wealth from the additional value 
which they give to the raw materials. For there is an immense 
difference between the value of the raw materials and the value of 
the same materials in a manufactured state. These high prices 
arise from the immense quantity of labor that is expended on 
the articles. This is the reason why manufacturing nations get 
wealthy, because they give employment to the whole population. 
Men, women, and children, are all employed. The effect on 
national wealth may be thus illustrated. If I had an estate so 
fertile, that for every bushel of seed, I should have a crop of GOO 
bushels, I should soon get rich. But if, for the price of a bushe) 



AND FOR INCREASE OF WEALTH. 271 

of wheat, I can buy a quantity of raw material, and by the labor I 
bestow upon it, I can sell it for the price of 600 bushels, it is the 
same thing to me as though I had an estate which yielded a crop 
of GOO-fold. In manufactures you can introduce a greater quantity 
of machinery. Agriculture labors under this disadvantage, that, 
whatever machinery we apply, all we can do is to increase the crop, 
and to cheapen some of the operations ; we can not, to any extent, 
quicken the process. We may, by machinery, weave a piece of 
cotton or silk, or make a pair of razors, in half the time heretofore 
employed ; but we can not make a field produce a crop of wheat, 
barley, or potatoes, in half the usual time. Seed-time and harvest 
will go on, and the operations of nature will not be stimulated, to 
any great extent, by any machinery we can apply." 

But to return to the main question of this chapter, as to whether 
the gain of individuals is the gain of a nation. The following prin- 
ciple, incidentally recorded by Ricardo, is itself alone sufficient to 
settle it, viz., that "every transaction in commerce, is an inde- 
pendent transaction." But Ricardo, and those of his school, aver, 
that in all cases, the nation profits in the profit of its merchants, 
who are engaged in foreign trade. The merchant trades to get 
rich, not to enrich his country. His eye is solely on his own inter- 
est, and he acts independently of all other results. "Every trans- 
action in commerce, is an indeiiendent transaction." The jobber, 
who stands between the importer and the retailer, trades on the 
same principle of self-interest and independence, with the importer ; 
the retailer also trades on the same principle ; and the consumer 
buys on the same principle. "Every transaction is independent" 
alike of every other, and of the general good. We will suppose 
it happens in the end, that consumers, retailers, jobbers, and im- 
porters, have together, in their independent transactions, and in 
the aggregate, bought more of the foreign world, than they have 
sold, and owe a balance in cash, which must be remitted, notwith- 
standing, as we will suppose, that the importers, jobbers, and retail- 
ers, have all got rich by these transactions. Is it not manifest, by 
other parts of this argument, that they have got rich at the expense 
of the country? 

M. Say carries the argument of profit arising from the sale of 
specie, to a most extravagant point. For example: "A nation 
gains in wealth by the partial export of its specie, because the 
residue is of equal value to the total previous amount, and the 
nation receives an equivalent for the portion exported. Whence 



272 THE GAIN OF INDIVIDUALS NOT ALWAYS 

it is evident, that governments should encourage, instead of dis- 
couraging, the export of specie." 

" The residue is of equal value !" That is to say, it must 
answer the purpose of the nation's " tools of trade," though it is 
but half a set, or a quarter it may be ; but the value of every prod- 
uct of labor, and of labor itself, must fall in that proportion, or 
tend to that point till it gets there, under a permanency of such a 
state of things. M'Culloch has laid down the principle — a sound 
one — thus : " If the quantity of money in Great Britain, were re- 
duced a half, the rate of wages [and of course the value of the 
products of labor] estimated in money, would decline in the same 
proportion." A sixpence must answer the same purpose that a 
shilling did before, else "the residue is not of equal value." If 
the shilling state of things was good, why disturb it for the profit 
of a few traders, when this 25 or 50 percent, depression of prices 
is an infinitely greater loss to the community, than what the traders 
have gained'; which, apparently, M. Say did not think of. Be- 
sides, if he does not propose this as a permanency, these fluctu- 
ations are a public, involving private, misfortune. What nation 
could stand this having just enough " tools of trade" one year ; 
half enough a year after ; three quarters enough the third year ; 
and so on ; prices constantly falling and rising accordingly, never 
too high, but often too low, sometimes ruinous? As to the 
"equivalent" received, the traders may get it; but does the nation 
get it? The nation, peradventure, has worn out a part on their 
backs, and the rest has gone into their bellies, which, as in the case 
of all spendthrifts and gourmands, they had better have done with- 
out. And so, for such reasons, " governments should encourage, 
instead of discouraging the export of specie !" 

Again he says : " The superiority of money, in the interchange 
between individuals, does not extend to that between nation and 
nation. In the latter money, and, a fortiori, bullion, lose all the 
advantage of their peculiar character as money, and are dealt with 
as mere commodities." 

It will be seen, that M. Say grants " the peculiar character of 
money" here, which is what we denominate its character as the 
instrument or " tools" of trade. But he says, " this does not 
extend to the interchange between nations." This is an unqualified 
mistake. Surely M. Say ought to have known, that the resort of 
an importer in making his remittances abroad, to a broker as an 
intermediate agent who trades in exchanges, does not affect the 



THE GAIN OF THE NATION. 273 

position of the importer in relation to his foreign creditor, nor the 
functions of his remittances as a consideration for the goods he 
imports. It is true, that, in the hands of the broker, the remit- 
tances are subjects of trade, as *' mere commodities ;" but as 
remittances from an importer in one country to a factor in another, 
whether bullion or coin — there is no ^'' a fortiorV^ in the case — 
discharge the appropriate functions of money as the instrument, 
and not as a subject, of trade. The case supposed determines 
this. It is " the export of specie," to pay for other commodities. 

Again this astute reasoner says : " Suppose, for a moment, the 
internal traffic and national wealth of a given country to be such, 
as to require the constant employment of a thousand carriages of 
different kinds. Suppose, too, that, by some peculiar system of 
commerce, it should succeed in getting more carriages annually 
imported, than were annually destroyed by wear and tear ; so that, 
at the year's end, there should be 1500 instead of 1000 ; is it not 
obvious, in that case, that there would be 500 lying by, in the re- 
positories, quite useless," etc. 

Give us the thousand carriages, and we are satisfied. The 
question is not about having an additional 500 on hand, not wanted; 
but about parting with 500 of the 1000 which are wanted. Most 
incautiously, M. Say has here granted the very point we contend 
for, to wit, that there is a certain amount of money which the 
trade of every country requires as " tools" to work with. Give 
us the thousand carriages, and the question is at rest. But w^at 
M. Say contends for, is, that we can not only do with 500, but that 
it would be a fine speculation to sell even that 500, after we have 
got them in hand. Is not this his reasoning ? We are certainly 
much obliged to him for the " carriages," because they are exactly 
what we wanted. 

18 



274 LABOR. 



CHAPTER XVIII. 



LABOR. 

Definition. — Who are Laborers. — Labor is Capital. — The Effect of not recognising this 
Fact in Public Economy. — The False Position awarded to Labor by the Economists. — 
The Position which they themselves occupy False. — Labor-Capital vested in Man him- 
self, and estimated by his Life and Powers. — Labor-Capital reproduces itself indefinitely. 
— It is the Parent of all other Capital. — It is more Profitable than any other. — It is the 
Gift of God, and Inalienable. — The Machinery of Society is its Product, which reacts to 
give it Value. — Labor-Capital may be under Restraint, in Certain Circumstances. — La- 
bor the Source of all Wealth, by creating all Commercial Values. — Labor bound to share 
in the Burdens of Society and entitled to Protection. — Labor in its True Position, 
defines Human Bights. — The Perversion and Abuse of those Rights, owing to its False 
Position in Public Economy. — The Results of the American Revolution put it in the right 
Place — Labor Man's Honor, not Disgrace. — It is the great Political Element. — Labor 
Discovered and made America. — American Independence, Labor's Jubilee. — Its Conse- 
quences. — " Rent," as practised in Europe, created Classes. — Labor considered as the 
Agent of Power, and as an Independent Agent. — The former Slavery, the latter Free- 
dom. — The First the State of Labor in Europe, the second its Condition in tlie United 
States.— The Malthusian Theory, as it justified European Economists and European 
Society, in enslaving Labor. — The Theory a Blasphemy. — This Problem solved in 
America. — Origin of the term Landlord, with its Lesson. — Labor, to be Free, must have 
an Alternative in another Chance besides the Wages offered, — Europe does not afford 
that Chance. America does. — Political Chances of American Citizens. — Causes and Ef- 
fects of the Difference in the Value of Labor and Money, in Europe and America. — 
The Power and Aims of Governments which oppress Labor. — The Interests of Civi- 
lization vested in Labor.— The Rights of Labor, Political. — The Rights of Labor the 
Strife of the Age. — The Pivot on which it turns. 

Labor is the application of the powers and devices of man, to 
supply the wants and gratify the desires of the race. 

It will be seen by this definition, that laborers are a very com- 
prehensive class. They are not confined to those who engage in 
manual toil ; who dig, or who plough the land or ocean ; who are 
occupied in the various branches of agriculture, manufactures, and 
commerce; in the mechanic, useful, or fine arts; who construct 
canals and railroads, build houses or ships ; who make hard hands 
and hard fists, by striking hard blows ; who wipe the sweat from 
the brow of toil, in any vocation, in doors or out, on land or water; 
— but all who apply their powers and faculties, of body or mind ; 
their hands, or their heads, or their fingers ; their invention or their 
skill ; their hearts or their intellect, to supply the wants of society ; 
— the scholar, the learned professions, teachers of every class, 
artists, authors, devotees of science and literature ; legislators, 
magistrates, judges, clerks, and many other classes, more than can 



LABOR. 275 

be named or thought of; yet, being devoted to productive indus- 
try and improving pursuits, necessary to society, and to the supply 
of the wants and desires of the race ; all these are properly ranked 
among laborers. 

Dr. Paley says : " Every man has his work. The kind of 
work varies; and that is all the difference there is. A great deal 
of labor exists besides that of the hands; many species of industry 
besides bodily operation, equally necessary, require equal assi- 
duity, more attention, more anxiety. It is not true, therefore, that 
men of elevated stations are exempted from work ; it is only true that 
there is assigned to them work of a different kind ; whether more 
easy or more pleasant, may be questioned ; but certainly not less 
wanted, nor less essential to the common good." 

Labor is capital, primary and fundamental. The position which 
is usually awarded, in systems of public economy, to what is called 
capital, as if labor were not capital, and capital of the most impor- 
tant kind, has tended to degrade labor, and to strip it of its essen- 
tial attributes as the producer of all adventitious w^ealth, or of that 
state of things which distinguishes civilized society from barbarism. 
It has also tended to cloud one of the most important branches of 
public economy in obscurity, and led to much embarrassment in 
the consideration of others. The natural order of things is thus 
reversed ; that which ought to be first, is put last ; the cause stands 
in place of the effect ; the agent is taken for the instrument ; the 
producer for the tiling produced. 

Although it will be convenient in this work, in order to avoid 
frequent repetition and unnecessary circumlocution, to employ the 
customary phrase, capital and labor, in the usual sense, it is due to 
a just consideration of the comparative claims of these two things, 
to assert the prior and paramount rights of labor, as to the position 
to which it is entitled in a system of public economy. Labor is 
capital of its own kind, not as a subject to be acted upon for the 
increase of its own value, but as an agent that imparts value to 
every other kind of capital which it creates, or which after having 
created, it employs as an instrument, or takes in hand for improve- 
ment. It is doubtless true, that the faculties or powers of labor 
are subjects of culture and use, for the increase of their skill and 
effectiveness, and in this sense are subjects of action for the in- 
crease of their value. In this particular, the faculties or powers 
of labor occupy the position of any other kind of capital, as sub- 
jects of improvement by labor itself. It will be observed, how- 



276 LABOR. 

ever, that it is not labor, but the faculty of labor, the value of 
which is thus increased. 

European economists, for the most part, if not universally, regard 
labor as a mere power, like horse-power, or any other brute force ; 
and what Ricardo and the Adam Smith school mean by " the pro- 
portion of the whole produce of the earth allotted" to labor, is 
simply that which is necessary for its subsistence, as for that of a 
horse, an ox, or any other brute. The three chief elements of 
public economy, as taught by Smith, Ricardo, and others of the 
same school, are " rent, profit, and wages." It must be seen that 
a system of public economy, constructed on such principles, is 
entirely unsuited to American society ; and though its doctrines in 
the abstract may often be correct, its whole must be totally inappli- 
cable to a state of things radically, fundamentally, and essentially 
different from that for which such a system is designed. It was 
morally impossible, from the social position of these economists, 
that they should be able to adapt a system of public economy 
to American society, not having thought it incumbent on them- 
selves to make any other provision for labor, than to save it from 
starvation, and to get the greatest profit out of it, as the owner does 
out of his ox or his horse ; and believing, as they do, that system 
the best which will secure this end most effectually. There can 
be no redeeming quality with Americans, for a system of public 
economy, one of the fundamental principles of which is of this 
kind, pervading it throughout, imparting its character to it, and 
constituting a part of its very essence. The three words, " rent, 
profit, and wages,'''' in the sense in which they are employed by 
Smith and his school, as representing the three comprehensive 
parts of their system, are sufficiently declaratory of its character, 
and look back to a feudal state of society. The things here in- 
tended are not to be found in this country, and are not tolerated 
by its institutions. 

Labor-capital is not vested in the effect of the faculty or power 
of labor, but in the power itself. The laborer himself is the origi- 
nal, fundamental, most indispensable capitalist of the world. La- 
bor-capital has no measure but that of the ability and life of the 
agent, which are always indefinite. Labor-capital is reproductive. 
It is true that other capital is called productive and reproductive, 
figuratively ; but its power of reproduction is not, like that of labor, 
in itself. It is the action of the labor of man upon it — or of his 
skill, which is the same thing — which makes it productive. Labor 



LABOR. 277 

— which here, and elsewhere in this work, is used metaphorically 
as the agent — can do the same thing one moment, one day, one 
year, which it had before done, other things being equal ; and so 
on, to the end of life. 

Labor-capital is the parent of all other capital. Other capital is 
chiefly, if not altogether, the creature of civilization, though the 
same thing, in substance, may be found in the savage state. But 
as a subject of public economy, it is regarded as one of the things 
receiving its definite form and measure from the hand of civil polity. 
It will be found, indeed, that the entire structure of civiHzation 
owes its existence to labor, and of course those parts of it which de- 
rive their tangible value from its forms, and which are regulated by 
them. Civilization itself is secondary and ministerial, in relation 
to all the capital which labor creates, and comes in to define and 
protect it. It was in part the value of these products of labor 
which made civilization necessary, that it might receive a definite 
form, and be made secure. No man can apply his hand or point 
his finger to a thing regarded as capital, which is not the product 
of labor. All intrinsic values are but fictions of the imagination, 
always impalpable, vanishing as they are approached. The dia- 
mond and the pebble are of equal value in the eye of the barba- 
rian, and would be equivalents in every other eye, but for the ex- 
istence of that capital, the product of labor, which is able to pur- 
chase the diamond at a high price. We do not, however, mean to 
say, that it is improper, or without significance, to use the terms, in- 
trinsic value. They are employed in this work in the usual sense, 
and are pertinent when so used, because they represent a practical 
idea. It will be found, however, that this value is entirely the 
product of labor; and this conclusion may be justified hj the doc- 
trines of all the economists worthy of respect. 

Labor is not only the parent of all other capital, bringing it into 
existence, or preparing it for use ; but the use of itself, in the dis- 
charge of these functions, is many times more profitable, for a given 
amount of value, than any other capital. In the United States, the 
laborer would think he did badly, if he could not lay up 50 per 
cent., or half of his wages. Labor, therefore, as capital, in this 
country, may be said to be worth 50 per cent. Frugal laborers 
often make it worth more than that, and soon obtain, in addition to 
their capital of labor, other capital, laid up and put to use, con- 
stituting the nucleus of a fortune — the foundation of wealth. Six 
per cent, is considered good use for money and other vested cap- 



278 LABOR. 

ital ; whereas, the savings of labor are often from 50 to 75 per 
cent, of its wages, besides the facuhy and chances of the laborer to 
husband his acquisitions as the foundation and means of future 
wealth. 

Labor-capital is the gift of God. This is evident from the fact, 
that it is vested in those powers and endowments which man re- 
ceives from the hand of his Creator. It is not dug from the earth; 
it is not the handy-work of man ; but it is the handy-work of God. 
Like God, it is endowed with intelligence, and as such is worthy 
of great respect. In relation to society, this capital is the property 
of the laborer. If it should be said, that all other capital is the gift 
of God, it is not true in the same sense, but only as the product of 
the agency of labor. All the economists agree, that nothing in 
nature, as it comes from God, is capital, in the economical sense, 
except as it is appropriated and brought to use by labor. The 
social state, as observed above, is the machinery that defines cap- 
ital, and it has put nothing in this position, which is not a product 
of labor, real or hypothetical. And if it should still be said, that 
this theory annihilates labor as capital, it may be answered, that the 
machinery of society brings it back to this position, and installs it 
in the full possession of these prerogatives. The laborer himself 
being a component part of society — he certainly ought to be, and 
is supposed to be — the capital of labor is vested in his powers to 
do whatever he is called, or may have opportunity, to do, to supply 
the wants and gratify the desires of the race, including himself, and 
for himself as to the compensation due to his exertions. The 
capital, and the consideration for the use of it, are his, and no man, 
no power, can lawfully deprive him of them; and as labor is the 
original capital of society, giving birth to all other forms of capital, 
the dignity of its position is equalled only by its importance. 

Labor-capital, though the property of the laborer, may be justly 
held under restraint or duress, as a punishment for crime. But 
even that condition does not alienate the right of property in the 
agent. Its use and the avails thereof are forfeited to the law for a 
season ; but when the law is satisfied, the offender that was, being 
free, is entitled to reassert his property for his own use and benefit. 
Labor may be bound under civil regulations, for an equitable quan- 
tum of its avails, to satisfy indebtedness incurred ; bat the faculties 
or powers of labor are not and can not be alienated. They are an 
inheritance from God, not transferable. The claims of parents for 
the services of children, during a minority fixed by the civil code. 



LABOR. 279 

if the parents choose to assert them, are for the payment of a just 
debt, incurred by the expenses of infancy and childhood. But the 
rights of independence consequent on this period, as recognised 
by Divine and human authority, presuppose man's inalienable 
right of property in himself, and in his own powers. 

Adam Smith says : " The property which every man has in his 
own labor, as it is the original foundation of all other property, so 
is it the most sacred and inviolable. The patrimony of a poor 
man lies in the strength and dexterity of his hands ; and to hinder 
him from employing his strength and dexterity in what manner he 
thinks proper, without injury to his neighbor, is a plain violation 
of this most sacred property." Smith is here arguing against the 
oppressive monopolies of town corporations in England, under the 
law of Elizabeth, a species of monopoly not known in this country, 
But he asserted a great principle here. If it was wrong and op- 
pressive to violate the rights of such sacred property, by prohibit- 
ing its use in certain forms, how much more wrong and oppres- 
sive to use such property, without a fair compensation ? 

It will follow, from the foregoing considerations, that labor is the 
source of all wealth. It is true, indeed, that the world, untouched 
by tlie hand of man, is rich in its resources. But all that which 
is commonly called wealth, and which constitutes the wealth of 
society, is adventitious — the result of human labor. The precious 
metals are obtained at great cost of labor ; and the forms given to 
them for the various purposes of use and ornament to which they 
are applied, requires much additional labor. Estates, buildings, 
roads, canals, improvements of every kind, public and private ; 
farms and plantations ; utensils and products of agriculture, of 
manufacture, of commerce, and of art ; carriages of burden and of 
pleasure; ships and navies; instruments of war and of peaceful 
vocations; towns and cities ; states and empires: means of luxury 
and of usefulness ; means and products of the intellectual, moral, 
and physical culture of the human race; laws and government; 
civil, literary, religious, and social institutions ; the entire and com- 
prehensive forms and values of human society, are severally and 
collectively the product and result of human labor. All that is 
prized by money, and bought with it, is obtained at the cost of 
labor. The immense and exhaustless material of wealth, as it ex- 
ists in the resources of nature, receives all its value from the hand 
of labor. "Whatever," says the Hon. Mr. Appleton, "exists 



280 LABOR. 

under the name of property, wealth, or capital, is the result or 
representative of previous labor." *• 

Labor is bound to share in the burdens of society. It has been 
seen, that labor is indebted to society for its position and its value 
as capital ; that it is capital of the most important and profitable 
kind ; that, in this country, it occupies a dignified place in civil 
and social organization ; and that, without civilization, it would be 
of little or no value. It is but reasonable, therefore, that it should 
sustain an equitable share in the expenses or burdens of society. 
But labor has a claim to protection from society. If labor is an 
important interest in and to itself, it is no less true, as already seen, 
that it constitutes the vitality of all other interests which are valua- 
ble in civilized society. It behooves society, therefore, as well 
from what it owes to labor, as from a regard to its own best inter- 
ests, and to all its interests, to secure to labor those privileges and 
advantages, which will promote its greatest prosperity, and which 
are indispensable to it. What are those privileges and advantages ? 
The answer is found in four words : Employment and fair 
WAGES. This is the only protection which labor asks, and it is 
what it has a right to demand, that is, that the organization and ac- 
tion of society shall not subvert this end. 

In support of this view of labor, as capital, and the original, fun- 
damental capital of society, Adam Smith says : " The annual labor 
of every nation is the fund which originally supplies it with all the 
necessaries and conveniences of life which it annually consumes." 
Stronger still, and more direct, he says : " Labor was the first price, 
the original purchase money that was paid for all things. It was 
not by gold or by silver, but by labor, that all the wealth of the 
world was originally purchased." Doctor Wayland says : " It is 
clear, that everything which we possess, either as nations, or as in- 
dividuals, must be the result of labor." 

But a point so clear need not be argued ; nor does it require au- 
thority ; since every one knows and feels it to be true, as soon as 
it is stated. Notwithstanding, however, that it is so plain a truth, 
and notwithstanding it has been recognised as such by some of the 
economists, it is nevertheless remarkable — very remarkable — that 
it has never been placed in its true position, in a system of public 
economy. A self-evident truth often passes current, without being 
appreciated. By the pride of science, it is sometimes tliought to 
be worth little, because it costs litde. This is an instance. This 
first cost of everything that has a commercial value, this " original 



LABOR. 281 

purchase-money of all things," as Adam Smith calls it, has never 
obtained its true position, not even with him who so highly honored 
it by this incidental compliment ; for it was purely an incidental re- 
mark, not made for any grave purpose, and it has been contested 
by some of his school, foreseeing, perhaps, the consequence. Much 
less has it been installed in its own proper place by his followers, 
who never did themselves the same honor of blundering into a 
recognition of the truth. 

Labor is not only an element of public economy, but it stands 
back of every other, and is the parent of all. Yet it is not found 
in this position, in any system ever published. Most of the econ- 
omists have put it in the last place. They found it in a degraded 
condition, and have done all in their power to keep it there, as 
shown in another chapter. 

Labor, in its true position, defines human rights, without a word, 
and men will scarcely fail to recognise them, while it remains there. 
But, when thrust out of place, into a false position, and chained to 
slavery ; when it is made to occupy this position in all the systems 
of public economy most in vogue in the world, it is no wonder 
that men who are entitled, and who ought, to be free, should be 
slaves. In its proper position, it proclaims a great truth, the con- 
sequences of which are stupendous, when carried out to all its 
legitimate results, in a system of public economy, morally and so- 
cially considered, as well as commercially — and more especially 
in the former aspects. 

The rocking of the cradle of American independence, jostled 
into one those distinctive elements on which the Free-Trade econo- 
mists have founded their system. It broke down the barriers of 
classes, which form the peculiar features of that system, and the 
doctrine was then proclaimed, that " all men are born free and 
equal." As before, more especially from that time, this nation 
became a community of working men, in whose eyes labor is an 
honor ; and he who does not work, is the exception to the general 
rule. Labor, therefore, in the United States, occupies an elevated, 
influential, honorable position. It is not the man that lives by 
work, but the man that lives without work, that is looked upon with 
disrespect. A gentleman of fortune and of leisure, who does noth- 
ing, has far less consideration than he, who, though equally able to 
live without work, devotes himself to some useful pursuit. 

When Adam Smith gave the following picture of Holland, sev- 
enty-five years ago, he described the United States : " It is there 



282 LABOR. 

unfashionable not to be a man of business. Necessity, among a 
people of small or middling fortunes, makes it usual for almost 
every man to be so, and custom everywhere regulates fashion. 
As it is ridiculous not to dress, so is it, in some measure, not to be 
employed, like other people. As a man of a civil profession seems 
awkward in a camp or a garrison, and is even in some danger 
of being despised there, so does any idle man among men of busi- 
ness." 

Labor, work, is the spirit, the genius of the American people. 
It was so from the beginning by necessity ; it became a fixed habit 
of the community ; and has ever been a part of the morale of the 
country. It is a grand political element ; it was born of a great 
political exigency ; it was nourished in a political cradle ; it grad- 
uated into manhood with political honors ; it made with its own 
hands, and has ever worked, the machinery of the political com- 
monwealth ; it lies at the foundation of the social edifice, pervades 
the entire structure, and its escutcheon stands out in bold relief 
from the pediment. And is this the thing, the element, the power, 
that is to content itself with the position and the doom of the third 
class enumerated, defined, and described by European economists, 
Vi^hose measure of degradation and of comfort could not be ex- 
pressed by Adam Smith and others, as seen in the citations from 
them, without a picture drawn from slavery ? 

Labor is the great political power in the United States. This is 
the natural result of the social history of the country. American 
society was a fragment of European society, broken off by violence 
in the denial of its rights, and forced to go out on a mission in 
search of freedom. It was the working genius of Columbus that 
disclosed the place of refuge ; it was the working enterprise of the 
first pilgrims to Massachusetts, to Virginia, to other points of the 
Atlantic coast, and to the shores of the great southwestern valley, 
that braved ocean perils and savage inhospitality, to plant the early 
settlements ; it was continued, courageous, self-sacrificing toil, that 
sustained those enterprises, and pushed them onward to success 
and eminence ; it was long-protracted work that raised the colonies 
into consideration, and into political and commercial importance ; 
and it was the hard tug of war, with a prodigal waste of blood and 
treasure, that finally emancipated the new world from the yoke of 
the old, and secured the wages, the reward of centuries of anxious 
and laborious toil. The breaking of the British sceptre was the 
installation of American labor in its rights ; It was the foundation 



LABOR. 283 

of an empire of working men ; and from that hour, labor has been 
the great political power of the country. The event was a jubilee 
— ^ihe jubilee of labor. 

There are few, perhaps, who look so profoundly into the social 
elements of the world, as exactly to appreciate, either the nature, 
or the gravity, or the importance, of the results of the establish- 
ment of American independence, as it is connected with labor, and 
as it bears upon it. After a long preparatory stage, coming at last 
to a crisis, labor, by that event, was lifted from its condition of 
hopeless degradation and misery in Europe, to a position of dignity 
and of commanding importance. It was a substantial, a thorough 
emancipation. Providence had opened the field, and labor entered, 
not without opposition, not without a struggle, and a fearful, an 
expensive one, to reap its reward. It was a boundless field — a 
field which vindicated Providence from the libel of the Makhusian 
theory, that God had made man, without providing for him — a 
field where labor could walk abroad with a consciousness of its 
own independence. The few who had parcelled out Europe 
among themselves, and made it subject to "rent," on their own 
terms — which is the primal source of the degradation of labor — 
had not gone before, to parcel out this broad continent, and to in- 
stitute a perpetual obstruction to the march of freedom. The field 
was open, where any man might go, and mark out the lines of his 
own estate, build his house, and work for himself and for his pos- 
terity, and not be forced to toil for a master, at the master's price. 
The same alternative is still before him ; and it is this great fact 
which guaranties the independence of labor in this quarter for 
ages to come — it may be said for ever. For it must be the fault 
of labor itself, if, with such advantages, with such space of the 
earth's surface and of time, it does not build its own house, and 
fortify its domain impregnably against the encroachments of future 
masters. It is the general condition of the American people, as 
original proprietors of the soil, or of whatever else they live upon 
or live by — as lords of their own domain — that constitutes the 
basis of their fortunes as freemen. This is the great principle of 
freedom, and freedom can not long exist without it. It was "rent" 
in Europe that created classes, and reduced labor to a condition of 
dependent, fawning, cringing servitude; and it is " rent" that holds 
it there. Hence the everlasting song of European economists, 
" Rent, profit, and wages." " Rent" for the first class, " profit" 
for the second, and " wages," or bare subsistence, for the third. 



284 LABOR. 

There is not one in a thousand of American citizens, who under- 
stands anythino; about such a state of things, or has any idea of it. 
And what is the reason? Because it does not exist here. God 
grant it never may ! 

But, there is a very important view of labor, regarding its rela- 
tive position in Europe and in the United States, necessarily enter- 
ing into the systems of public economy adapted to these two quar- 
ters, not yet distinctly brought out, although it has been approached, 
and even repeatedly suggested, in the foregoing remarks. We 
mean that position which is indicated in the one case, by labor as 
the AGENT OF POWER, and in the other as an independent 

AGENT. 

It is supposed, and will doubtless be conceded, that the design 
of the government and institutions of the United States, was to 
establish individual, as well as national independence. The latter 
is of little, may be of no value, without the former. The most 
absolute despotisms on earth enjoy national independence. It was 
individual, private, and personal rights which the fathers of the 
American Revolution fought and shed their blood for; and for 
none more especially, more distinctly, or more emphatically, than 
that the people should not be taxed without representation. In this 
claim was involved the personal right of every man to the enjoy- 
ment and disposal of the avails of his own industry and labor, as 
also his protest against any portion of them being taken for the 
uses of the commonwealth, without his consent in a representative 
capacity. By the establishment of this principle, at great hazard, 
and at the cost of much blood and treasure, personal or individual 
as well as national independence was acquired. This was a sub- 
stantial independence, and from that time to this, labor, for the 
first time, in the history of modern society, has become an inde- 
pendent AGENT. In Europe, it was, and still is, the agent of 
POWER. It has been forced into this latter position by the 
system of European economists. 

It should be observed that labor is never mdependent, when it 
has no alternative ; that is, when it is not strong enough in its own 
position to accept or reject the wages offered to it in any given 
case, if unsatisfactory, and when, in such a case, it can not turn 
away, and live and prosper. When it can do this, it not only has 
a voice in its wages, but the parties in contract, the employer and 
the employed, stand on a footing of equality. This principle is 
equally applicable to the producer of commodities of any descrip- 



LABOR. 285 

tion, as proprietor of a farm, workshop, or any other producing es- 
tablishment, over which he presides, and where, perhaps, he labors 
with his own hands, as to him who works for hire. The time has 
never yet been in the history of the United States as an indepen- 
dent nation, when labor was not in this sense an ijidependent 
agent — when it could not reject an unsatisfactory offer, and yet 
live. It is not pretended that labor has been able to dictate its 
own terms. That would be equally improper and unjust, as for 
the employer to do it. But it has always had an alteriiative. As 
a last resort the American laborer can at any time go to the back- 
woods. His independence is never necessarily sacrificed. 

This wide back-woods field for American labor, is a security for 
its independence for ages to come, if not for 6ver, which no Eu- 
ropean economist could ever appreciate. It was for want of this 
light, that Mallhus stumbled, and all his followers after him, not 
excepting M'Culloch, who was doubtless influenced by the theory 
of Malthus. The European economists have never been able to 
see how labor could be independent, and have planned their sys- 
tem on the assumption that it must for ever remain the agent of 
power, and be satisfied with a bare subsistence. > 

It is this independence, in connexion with the means of sup- 
porting it, that has sustained the wages of American labor, and 
kept them so far above the rates of wages in Europe and other 
foreign countries. 

In the light of this contrast, the condition of European and other 
foreign labor is one of absolute bondage. In the first place, it is 
for the most part deprived of all political influence. This is the 
primary cause of its misfortunes. In the next place, and also for 
the most part, it has no voice in its wages. There is no alternative 
left to it. It must work for what is offered, and work hard, or 
perish in want ; and the wages doled out are measured by so nice 
an estimate for bare subsistence, as to be often insufficient for 
that. In all those countries, labor is the agent of power. Power 
dictates its wages, controls it, enslaves it ; and it needs but a little 
reflection, in connexion with what has already been said, to see 
that this difference is immense, and immensely important. 

Mr. Malthus's theory, that population tends to an inconvenient 
and self-destructive augmentation, solved, as was supposed, the 
great problem of human society, as it had existed in Europe for 
so many centuries — as in all history it has to a great extent ex- 
isted — and fully justified the subjection of the masses to the ser- 



286 LABOR. 

vice of the few. It relieved the responsibility for the general op- 
pression of mankind so much as not only to excuse the offence, 
as being the unavoidable result, the imperative decree of Provi- 
dence ; but it transformed the oppressors, in the very act, into the 
character of benefactors to the race. Instead of any fault of the 
few who lived on the labor of the many, the many were laid under 
the greatest obligations when the few should give them employment 
enough for subsistence — to keep soul and body together. With 
such a beautiful solution of this difficult problem, came also a sat- 
isfaction of the public conscience, and a confirmation of all the other 
doctrines of the European system. It was manifestly much easier 
to pronounce the evils of society no evils, than to apply a remedy ; 
and it was a complete vindication, though it ought to have been 
shocking to entertain the thought that God, and not man, was re- 
sponsible for them. Such, however, seems to have been the 
result of Mr. Malthus's theory. 

But the opening of the new world, and the migration of the 
oppressed portions of mankind to this quarter, have presented a 
class of facts which falsify this theory, and nullify its conclusions 
— facts which existed at the very time when that theory was 
formed, and when it was adopted with so much eagerness to bolster 
up a fallacious system. The facts are simply these : The land of 
the American continent is open and free to all, and there never 
has been a time, and probably never will be — it certainly is not 
necessary — when a laboring man can not turn away from the 
wages offered him for his services on hire, and go and live an inde- 
pendent life on the unoccupied lands of the country. He may 
there be the proprietor of his own estate, and have all the rent, the 
profits of culture and of his labor, to himself It is this chance, 
for ever existing, which for ever makes American labor indepen- 
dent. 

The importance of this truth can not be overrated, and it is wor- 
thy of very particular consideration, since so much depends upon 
it. It is manifest that the European economists were greatly em- 
barrassed, in view of the state of society with which they were 
surrounded, till the Malthusian theory came to their relief — a sad 
and gloomy prospect, indeed, for the masses of mankind. But it 
was a rescue for the economists. It was not only an apoloijy for 
their general system, but an apology for that state of society out 
of which their system grew. In the order of nature, land was 
the first property, and the products of its culture and use were the 



LABOR. 287 

next. The land belonged to the king ; the king parcelled it out 
among his lords — hence called ^'■landlords ;" and hence the use 
of this term all the world over. The advancements of civilization 
erected on this basis a vast superstructure, and the principles of 
the basis ran up through and pervaded the whole. The system, 
as stated by the European economists, could always be reduced to 
three primary and fundamental elements : " Rent, profit, and wa- 
ges ;" the first going to the lords, or the superior classes ; the 
second to the managers of their estates ; and the third being the 
subsistence of the laborers. " To determine the laws," says Ri- 
cardo, " which regulate this distribution, is the principal problem 
in political economy." 

But, it must be evident to every reflecting person, tolerably 
acquainted with the facts and state of society in these two great 
quarters of the world, Europe and America, that the three things 
above named as the fundamental elements of public economy in 
Europe, do not exist in the United States — are not to be found 
here, either in form or fact, so as to make a common basis of a 
common system. As the two last grow out of the first, and as the 
first does not exist in this country in any shape whatever, to an 
extent sufficient to constitute an element of public economy, it is 
manifest, that the other two, following from the first, must be want- 
ing also. Inasmuch, therefore, as there can not possibly be a com- 
mon basis, there can not be a common system. 

Under the European system labor is forced into service. It has 
no alternative — no choice. It must work on the terms offered, 
or starve. It is, therefore, proper to say, as is the fact, that labor 
there is the agent of power. And in this phrase, agent of power, 
m such an application, it should be observed, is involved a principle 
— a principle of great and profound significancy, and of potent in- 
fluence. The power that is thus usurped, is the dominant power 
of the European world. It may, perhaps, be supposed, that the 
European economists could not see how it was possible for labor 
to be free, independent, and have a voice in the terms of its ser- 
vices. In the state of society that existed around them, and as far 
as their vision extended, they could see nothing for labor but the 
doom o( 3. forced service — a service forced by stern necessity, viz., 
that of subsistence. It was natural, therefore, that they should make 
no other provision for it in their system, and they never did make 
any other. They could not see so far as to discover what new 
light, the new experiments in the western hemisphere, would bring 



288 LABOR. 

to this great theme ; though, if the abstract proposition had been 
considerecf, they might easily have seen, that labor would rise to 
independence, the moment it should be put beyond the grasp of a 
forced service. But it is not, perhaps, strange, that they could not 
foresee this from their remote position, when it is scarcely under- 
stood even by those who are planted in the midst of the scene, and 
are perfectly aware of the fact. How few of the most reflecting 
men in the United States, of the most erudite scholars even, or of 
the most profound statesmen, ever think of the influence and 
power of that political element which consists in the fact, that every 
American laborer can go into the backwoods whenever he pleases, 
and live a perfectly independent life? Thousands, the great ma- 
jority, may be averse to such a resort ; but some go, all can go, 
and they all know the field is open before them. Ever since the 
western shores of the Atlantic were first touched by the feet of 
European emigrants, the tide of population has been penetrating 
the heart of the American continent, without meeting with any 
landlord to demand rent, or with any manager of his estates, to 
absorb the profits of their enterprise. No kings had gone before 
to parcel out the territory among the few and lordly supporters of 
their thrones ; or, so far as that had been done, these royal patents 
were, for the most part, nullified by the result of the American 
revolution. The way westward has always been open and free to 
all, and is still open and free. A man has only to push on a step 
farther than his predecessors, and set up his stakes. From that 
moment he has a home, is lord of his own estate, and by industry 
and economy may be independent of all the world. Such is the 
actual movement, and such the practical operation of American 
society. It always has been, and always is, moving on, and ex- 
tending its limits, by the impulses of freedom, and the natural de- 
sire for independence. Like the undulations of the deep, wave 
follows wave, and it is all one great sea. All is composed of the 
same elements, and all is affected by the same influences. They 
who stay behind in the original centres of civilization, are as free 
as those who range on its outmost borders ; that is to say, their 
services, if they work on hire, are no more forced than those of 
the western forester. Both work for independence, aspire to it, 
enjoy it ; and each has it according to his own taste. 

It is this constant movement, this constant tendency to move, and 
this knowledge that it is always in every one's power to move, into 
such a field, which constitute the independence of American labor. 



LABOR. 289 

and make it an independent agent, as opposed to the position 
of European labor which is the agent of power. The latter is 
a forced, while the former is a free and unconstrained, service ; 
one is serving masters, while the other is working for one's self. 

This is not only a political element, considered as a power in 
the state ; but it is an element of public economy, considered as a 
cause of public and pj:Ivate wealth. 

Starting with the rights of independence, as defined in the fore- 
going remarks, the American laborers aspire to the improvement 
of their condition, to add to their property, to accumulate com- 
mercial values, to get rich, to become wealthy, and to rise in the 
world. According to the declared principles of American society, 
which are well known to all, from the first start in life, and in all 
its stages, there is no honor, no trust, no place of power and in- 
fluence, from which an American citizen is excluded by birth ; and 
so far as the stepping-stones to distinction and eminence are made 
to depend on property and wealth, these, too, though a man begin 
the world whh nothing, are placed within the reach of every indus- 
trious, frugal, and enterprising citizen. Labor, as capital, in the 
United States, is generally, if not universally, worth fifty per cent, 
on itself. That is to say, a frugal laborer can easily lay up half of 
his w^ages, which of itself, in all his savings, becomes, by proper 
investment, a productive capital — a nucleus, a foundation of 
wealth. The cumulative power of his labor and of his acquisitions, 
is very great, if well husbanded ; and the country is full of ex- 
amples of men rising from nothing and from the humblest con- 
dition, to great wealth, and to the highest stations of honor and 
trust. Such are the goals of American industry and -enterprise, 
from no one of which is any man necessarily excluded, by any law 
of society, however low may have been his starting point, however 
humble his birth. 

This, as will be seen, is a perfect contrast, the direct opposite, 
of the condition and prospects of the European laboring classes. No 
provision is made for them, but that of bare subsistence. It is not 
intended or expected that laborers there should better their con- 
dition, and rise. They neither hope nor strive for it. They are 
born like cattle to be fed and worked ; and the plan of society and 
of the economists, is, to get as much work out of them as possible. 
But the plan of American society is to give to all classes equal 
chances ; that of European society, to maintain the distinction of 
classes, and never to allow one to be merged in another, or all in 
19 



290 LABOR. 

one. In Europe, as a general rule, a man is born to his condition, 
high, middle, or low. In the United States a man makes his con- 
dition, and there is no obstacle, but his own lack of will and enter- 
prise, or defect of natural endowments, in the way of his acquiring 
wealth, and gaining the highest consideration in the community. 

The cause of the difference between the wages of American and 
the wages of foreign labor, and between the value of American and 
that of foreign capital, is political, and clearly revealed in the forego- 
ing statements. The high position of American labor, is the award 
of freedom ; the wages of American labor, are freedom-wages ; they 
are true and just ; and when they fall, it will only be because free- 
dom has fallen. The high value of American capital, is a freedom 
value ; and when that shall be brought down to a common level 
with capital in Europe and elsewhere, freedom will be buried in 
the overthrow. High wages, and a high value of every species of 
property, as compared with those of Europe, are identical with 
freedom. The spirit of man falls with his wages — with the reward 
of his industry, toil, and care. Crush the latter, and he is crushed. 
Possibly he may rise from the impulse of despair, and make a new 
effort. He may succeed ; but the chances are against him. Who 
can break the yoke on the neck, and the chains on the hands of the 
/abor of Europe, and of other portions of the world? Can the op- 
pressed break them ? — No. Will the oppressors do it? — No. 

The power of governments which oppress labor is immense, 
arising from this source, at home and abroad, in moral and physical 
means. Suppose that two thirds of the fair reward of the labor of 
Europe is extorted and appropriated by its kings, princes, courts, 
nobility, gentry, and manufacturing and commercial millionaires. 
Two thirds of a fair value, is, in fact, about the average proportion 
of deprivation of right, which is perpetrated on the labor of that 
part of the world by the classes above named. It will be seen, that 
such a fraction of the rightful reward of the labor of Europe, or 
twice as much as it actually realizes, is an immense power. It is a 
great power in any single state, nation, kingdom, or empire. No 
small portion of this goes into the public exchequer, to be disbursed 
for the augmentation and exertion of power. It is all appropriated 
directly or indirectly for these objects. The adjuncts and props 
of power are an essential part of it. The nobility that surrounds 
a throne, is one of its chief supports. All wealthy proprietors of 
land or other capital, rich manufacturers, rich merchants, and gen- 
try, have their security in the stability and strength of the govern- 



T^ABOR. ^H 

ment, and can afford to contribute largely from their large incomes 
derived from oppressed labor, for the support of the government 
which protects them. A crovs^n is usually v^^ealthy in itself, and 
costly to the people ; a throne is costly ; a nobility is wealthy, 
and its income great ; wealthy proprietors of land, great man- 
ufacturers, rich merchants, rich tradesmen, rich bankers, rich 
holders of funded capital, rich gentlemen, and a variety of classes 
coming under the category of rich — all occupy a position in a state 
of society where labor is oppressed, that is interested in the sup- 
port of power, and in the depression and hard fate of the laboring 
classes. The power that keeps them down is sustained by robbing 
them of the reward of their toil. They have neither the spirit to 
assert, nor the means of vindicating, their rights. 

But the power thus derived, is not only efficacious at home, to 
sustain itself, but it is influential abroad, to diffuse itself. It is mor- 
ally influential, by its political connexions, in extending and forti- 
fying the empire of its principles ; and physically so, if needs be, 
in propagating them by the force of its arms. It can afford sacri- 
fices, in expectation of a valuable return, which, as is seen by the 
parties concerned in such cases, will in the end yield ample indem- 
nification. 

This, as shown in another chapter, has, for nearly a century, 
been the policy of Great Britain, in the advocacy of Free Trade, 
not to practice it herself, but to persuade other nations, especially 
the Qnited States, to do it, by providing them with the argument 
of Adam Smith and those of his school, on this point. It is shown, * 
in the chapter here referred to, that this argument is a contrivance 
of the British government, and that it has been sustained by them, 
ever since those British authors began to write on the side of Free 
Trade. 

All other interests of civilization, as before shown, having a com- 
mercial value, are indebted to labor for that value. A thing of 
commercial value can only be exchanged for money, or for a giiid 
irro quo that is prized by money. There are privileges, rights, and 
affections, in the social state, which can not be thus prized — which 
are indeed priceless. These, too, are the fruits of care and pains, 
public and private, except such as are the spontaneous product of 
nature, which are also susceptible of improvement by culture. But 
they are too sacred to be classed among things of commercial value. 
Though they may have cost money, they can not be exchanged 
for it. 



f2i92 LABOR. 

But, it will be found, that all things of a proper commercial 
value, are usually the products of labor. Accident, or good luck, 
may put a person in possession of a valuable exchangeable com- 
modity, that cost little or no trouble. But such exceptions do not 
impair the general rule. Labor, therefore, in civilized society, oc- 
cupies an elevated, important, commanding position — a position 
that supplies the wants of man, and gratifies his desires. It may, 
therefore, justly be denominated the great interest of civilization. 
But labor is especially the great interest of the American people. 
This republican empire was founded on labor, and was intended to 
be sustained by it. The fathers of the country were working men. 
The mothers and their daughters worked. They claimed the right 
of supplying their own wants, by their own arts, industry, and toil. 
This right was denied by the mother-country. They asserted it 
by force, and acquired it by victory. The policy of their oppres- 
sors was to keep the wages of American labor down to the Euro- 
pean level, by prohibiting the manufacturing arts and profitable 
commerce, and by confining the people of the colonies to as few 
vocations as possible, chiefly agricultural, thus making and holding 
them dependent. The great object of the American revolution was 
to vindicate the rights of labor, which, with the American fathers, 
comprehended all other valuable rights. 

Therefore, the rights of labor are j^olitical. And they are polit- 
ical in relation to a foreign state of political society to which they 
are opposed. This is a great practical point of this subject, which 
claims special attention and the gravest consideration. 

That state of political society, to which the rights of American 
labor, as acquired in the establishment of American independence, 
are opposed, and which is for ever hostile to these rights, is that 
already referred to in European nations — it may be found else- 
where — which always has kept, and still keeps down the wages 
of labor to a bare subsistence, the average of which is not more 
than one third of its fair reward. This is the state of society on 
which European system of public economy are founded, which 
gave birth to them, which they are designed to perpetuate, not even 
meditating any change in favor of labor ; and labor, in those sys- 
tems, is a principal and fundamental element. The consequence 
is a political result, originally the cause — a seeming paradox, that 
a thing should be father to itself — a result, planned by those who 
framed and who maintain the system, viz., that the working classes 
live and die, as they were born, poor and dependent. It is impos- 



LABOR. 293 

sible it should be otherwise, in such a state of things. The laboring 
classes have no chances to improve their condition, and to rise ; it 
is not intended they should. They have no pride, no courage, no 
ambition, no hope. These sentiments are extinguished by the se- 
verity of their doom. They were born, they live and die, slaves 
to political tyranny. 

In the meantime, American political society, founded on the rights 
of labor, has grown up — has established itself — has secured to la- 
bor a fair reward — and the practical operation of it has demon- 
strated to the world, that any man, though born poor, may die rich ; 
and that his personal qualities, and not his birthright, give him con- 
sideration in society. 

In the meantime, also, that old political system, which depresses 
labor, and holds it in bondage, has maintained and fortified its po- 
sition ; though it has changed its mode of warfare against the rights 
of labor, it has not given up the contest ; what it could neither ar- 
rest, nor subdue, by force of arms, it has undertaken to conquer by 
policy ; and the great pohtical contest of the age is, whether the 
RIGHTS OF LABOR, as established on American soil, and nourished 
by American blood, shall be maintained, and extend their empire ; 
or whether they shall be crushed by political devices — no man 
rising to say he will die for them — and the world fall back to where 
it was two centuries ago. 

This strife consists in the array of the money and labor of Europe, 
as producing powers — of the money and labor of all those coun- 
tries with which we have commercial intercourse, the average 
joint value or cost of which is one — against the money and labor 
of the United States, as opposing producing powers, the average 
joint value or cost of which is two. It needs no prophet to pre- 
dict the result. In a contest of arms, one may chance to beat two 

— a small force may rout a much larger one. But in the peace- 
ful pursuits of trade, a merchant can never stand before a rival in 
the same market, who can afford to sell cheaper — and a good deal 
cheaper. The case settles itself, and the result is an absolute cer- 
tainty. 

The wages of labor in Europe, and in other countries foreign to 
the United States, have been kept down by oppression — by force 

— and money, and all capital^ derived from it, cost in proportion 
to what is paid for labor. The wag^ of labor in the United States, 
as the result of political freedom, have risen to three for one of la- 
bor in Europe; and money, and all other capital here, cost in pro- 



294 LABOR. 

portion. Now, it is proposed, by Free Trade, to put the products 
of the money and labor of the United States in open competition 
with the products of the money and labor of Europe. Does not 
every one see what will be the result, and that American labor 
must come down to the same price, before it can compete with 
the labor of Europe ? In other words, that European policy and 
oppression shall govern the prices of American labor? Such is 
the question, and such, on a Free-Trade platform, must be the re- 
sult, unless it can be shown, that men will give two for that which 
they can buy for ojie, or for one and a half^ or for one and three 
fourths, or for one and nine tenths. No matter what the difference 
is, they who can sell lowest, will have the market. 

It must be seen, that this is an infallible commercial principle, 
destined, everywhere and in all cases, to control results, on the 
basis of Free Trade. It does not follow, however, that foreigners 
will sell us cheaper, as a matter of course, in the long run. They 
will do it only to gain and hold the market; and we shall yet 
show, that a Free-Trade system is the most costly to the people 
of the U nited States, even in the very things proposed to be ob- 
tained cheaper by it ; much more in the general result. 



COST OF MONEY AND LABOR IN EUROPE AND U. STATES. 295 



CHAPTER XIX. 

THE DIFFERENCE BETWEEN THE COST OF MONEY AND LABOR 
IN EUROPE AND THEIR COST IN THE UNITED STATES, AS 
IT AFFECTS PUBLIC ECONOMY FOR THE UNITED STATES. 

The comparative Prices of Labor in Europe and the United States. — These Prices deter- 
mine the Value of Money and other Capital in these two Cluarters — Money worth 
more than other Capital. — Its Value in any Country, and at any given Time, determined 
by the Rate of Interest. — Some Account of the Rates of Interest in different Countries, 
and at different Times. — The Average Interest of Money in the United States, as com- 
pared with the Average in Europe. — Difference in the joint Cost of Money and Labor 
in these two Cluarters. — Different States of Society the Causes of this Difference. — The 
Greatness of the Power acquired in Europe, by the Wrongs to Labor. — The practical 
Importance, in forming a System of Public Economy for the United States, of consid- 
ering the Difference in the Cost of Money and Labor in Europe and America. — A 
Commercial Principle lies at the Bottom of this Difference, and controls Results. 

The Statistics of the prices of labor in the United States and 
in Europe, are so often cited, as to cause it to be universally and 
well known, that the difference in these two quarters is very great. 
Taking the average of prices in Europe, it has been found that 
they are less than one third of the average prices in the United 
States, for the same descriptions of labor. For the purposes we 
have in view in this work, therefore, we assume, whenever there is 
any occasion to refer to it, that the average price, cost, or value of 
American labor, is as three to one of the average price, cost, or 
value of European labor. 

Labor being the parent of all other kinds of capital, as before 
shown, it will follow that the cost of everything which it creates is 
measured by its price. Adam Smith, Ricardo, and others, have 
set up labor as the measure of all values. Smith is so earnest on 
this point, that he takes pains to show, that money is not the meas- 
ure of value, as some say it is, but that labor discharges that func- 
tion. We agree with him, that money does not ; and we are not 
disposed to make any controversy with his position that labor does, 
if he means only to assert a general principle, that labor influences 
prices, causing an approximation toward an agreement in prices 
with a given amount of labor; but we shall have occasion to deny 
that any certain reliance can be placed upon labor as the measure 
of price, and to maintain that supply in relation to demand, in 



296 DIFFERENCE IN COST OF MONEY AND LABOR 

every given case, is the rule that controls prices. It is sufficient 
for our present purpose to say, that labor is the measure of the 
cost of other capital ; from which it will follow, that, as the aver- 
age price of labor in Europe is not more than one third of its av- 
erage price in the United States, the average cost of all the capital 
which in these two quarters labor creates, being all other than itself, 
can only be in the same ratio, viz., as one in Europe to three in 
the United States. 

Money is the product of labor as truly as any other capital, and 
its value is naturally determined by it. But money, as a species 
of capital, may be considered as worth more at the same cost, than 
other kinds, inasmuch as it is a common currency, and will always 
purchase all other kinds, and supply wants more certainly and 
more conveniently than any other. 

The comparative value of money, in different quarters of the 
world, and at different times, is ascertained by the comparative 
rate of interest that is paid for it, on an average, as a subject of 
trade. Adam Smith states that under Henry VIIL, interest above 
ten per cent, was declared unlawful ; that it was reduced to eight 
per cent, under James I. ; to six per cent, soon after the restora- 
tion ; and to five per cent under Queen Anne. It has gradually 
fallen since that time ; and money was borrowed by the British 
government, in the old French war, as we call it here, at three 
per cent. Holland, in the time of Adam Smith, some 70 to 80 
years ago, borrowed at two per cent., as her credit was at the high- 
est point ; and her private citizens borrowed at three per cent. 
Legal interest in France, in the early part of the 18th century, 
fluctuated from five to two per cent. 

It is true, that these laws against usury prove no more than that 
interest was exacted at higher rates than the law allowed, and that 
these legal reductions followed in the train of the market reductions. 

There have been times and countries in which the interest of 
money was so high as to be now almost incredible. It appears by 
the letters of Cicero, that Brutus loaned money at forty-eight per 
cent, in the latter days of the Roman republic ; and Adam Smith 
states that forty, fifty, and sixty per cent, had been paid for the use 
of money, by farmers of estates in Bengal, and the crops mort- 
gaged to secure principal and interest, so great were the profits. 
It has happened, for very short periods, when money was tight, 
and much was at stake, that interest as high as the highest of the 
above rates, has been paid in the city of New York. But it is not 



IN EUROPE AND IN THE UNITED STATES. 297 

these exorbitant, accidental, and transient rates of interest, but the 
general average, in a course of years, that determines the value of 
money, as a subject of trade, in different quarters of the world. 

The use of money is bought and sold in market, like anything 
else, and the rate of interest is its price. That is to say, when the 
average rate of interest in one country is 6 per cent., and in another 
3 per cent., the value of money is twice as much in the former as 
in the latter, or two to one. The same rule is applicable to the 
variations of interest in the same country at different times. Adanj 
Smith has laid down this rule very clearly in the following terms : 
"Whatever are the causes which lower the value of capital, the 
same must necessarily lower that of interest, and exactly in the 
same proportion. The proportion between the value of capital and 
that of interest, must remain the same." There may be transient 
exceptions to this rule, from either a temporary scarcity or plenty of 
money in market; or more properly, perhaps, from the difficulties 
or facilities of obtaining it. 

The following table of the rates of discounts in London, for the 
last twenty years, on first-class paper, by finding the account of the 
same firm, doing business through the same brokers, for that period, 
was furnished by a London correspondent of the New York Courier 
and Enquirer : — 

January, 1828 3 percent. January, 1838 3| percent. 

July, do 21 percent. July, do s.3 percent. 

January, 1829 3| per cent. January, 1839 3| per cent. 

July, do 3^ percent. July, do 5| percent. 

January, 1830 3 percent. January, 1840 6 percent. 

July, do 3 per cent. July, do 4| per cent. 

January, 1831 3| per cent. January, 1841 .5 per cent. 

July, do 4 percent. July, do 5 percent. 

January, 1832 3| percent. January, 1842 4^ percent. 

July, do 3i percent. July, do 3| percent. 

January, 1833 2h per cent. January, 1843 2f per cent. 

July, do 2^ percent. July, do 2 percent. 

January, 1834 3^ percent. January, 1844 2 percent. 

July, do 3^ per cent. July, do 3| per cent. 

January, 1835 3| percent. January, 1845 2| percent. 

July, do 3 i per cent. July, do 2| per cent. 

January, 1836 3f percent. January, 1846 4| percent. 

July, do 4 percent. July, do 4 percent. 

January, 1837 4^ per cent. January, 1847 4 per cent. 

July, do 41 percent. July, do 5| percent. 

The medium of these rates is about 3^ per cent. 

The interest of money on the continent of Europe, is generally 
less than in England. If we put the rate of interest in Europe at 



298 DIFFERENCE IN COST OF MONEY AND LABOR 

3 per cent., and that in the United States at 6 percent., it is prob- 
ably a fair exhibit ; as the latter as often and as much exceeds 6 as 
the former exceeds 3. It would, perhaps, be fair to say, that 
money is worth as much more in the United States, than in Europe, 
as labor is. The difference in the value of property generally, it 
might perhaps be said necessarily, corresponds nearly with this 
measure, inasmuch as there can be no good reason why the per- 
manent capital created by labor should fall below itself in value. 
But, as before remarked, money capital may be considered as 
worth more than other kinds at the same cost, it being always 
more available for use as a common currency. 

It will be seen, therefore, that the cost of money in the United 
States is rated very low, as compared with its cost in Europe, if the 
difference be allowed to be as liuo to one. It is proposed, however, 
in the general argument of this work, to allow that the difference is 
only as three to two, which is a sacrifice in the force of our argu- 
ment. 

It will be seen, therefore, if the difference in the price of labor 
in Europe and the United States, is as three for the latter, and one 
for the former, as shown above ; and if the difference in the cost or 
value of money, in these two quarters, be assumed as three to two, 
that the joint value, or cost, or price, of labor and money in Eu- 
rope and the United States, is as two for the latter, and one for the 
former; or one hundred per cent, difference; that is to say, money 
and labor together cost twice as much in the United States as they 
do in Europe. The true difference is, in fact, considerably in ex- 
cess of this. 

The primary, fundamental cause of this difference, is disclosed 
in another chapter, viz., that the labor of Europe is held in a state 
of bondage, and forced to work on terms prescribed by those who 
in fact wield the power of masters. Down to this time, labor in 
Europe has always been kept in a state in which it is compelled to 
toil for bare subsistence. The reward of labor as a compensation 
for the services of one human being rendered to another, both of 
whom are assumed to be on a footing of equality by nature, and 
in all the rights of the social state, never entered into the policy of 
the states of Europe, and was never admitted as an element in the 
systems of European economists ; but it has always been carefully 
excluded from both. The principle adopted and acted upon by 
both — by one in the promulgation and exposition of creeds in 
their abstract forms, and by the other in carrying them out in the 



IN EUROPE AND IN THE UNITED STATES. 299 

practical operations of government — has been such a provision for 
labor as will merely perpetuate the race of laborers. It is so ex- 
pressed by Adam Smith, and others of his school, in terms, as 
already seen in another chapter. Nothing has ever been contem- 
plated, by either the economists or governments of Europe, ex- 
cept the bare subsistence of laborers, that they may render the 
most effective service, and that the race may not become extinct by 
deprivation and want, in the same manner as provision is made for 
beasts of burden, draught, and other services. The principle of re- 
ward, of compensation, for laboring man, was never thought of by 
them, any more than that of rewarding the laboring beast; and 
the laboring man in Europe, for the most part — in all that regards 
the principles of public economy there, and in all that is devised 
and put in force by European governments, to the extent of their 
ability, which, unfortunately has too much control in the premises 
« — has no more to do in fixing the measure of his subsistence, than 
the laboring brute. It is public economy there that presides over 
his destiny, and political power that controls it. 

This radical and fundamental cause runs up and branches out 
into all departments of European society, distributing itself in a 
thousand ramifications, where it occupies, in these respective stages, 
the position, and discharges the functions of mediate or intermedi- 
ate causes. All these influences, however, have but one origin, 
viz., that principle of the European creed, that the masses were 
born to serve the few.* 

The greatness of the power acquired by this wrong done to the 
labor of Europe, and the parties by whom it is appropriated, are 
worthy of a moment's consideration, in addition to what is said on 
this point in the preceding chapter. It is nothing less than two thirds 
of the fair reward of labor in that entire portion of the world, if it be 
admitted, as will certainly be maintained, that the reward, the com- 
pensation obtained by American labor, is a just compensation — 
that it is the freedom and the fair price. It is a great power in 
any single state, for ever increasing in a sort of geometrical ratio. 
" A. great stock with small profits," says Adam Smith, *' increases 
faster than a small stock with great profits. Money, says the prov- 

* Of course it will be understood that all this reasoning is predicated on the 
state of European society before the general revolution attempted in 1848, com- 
mencing at Paris. What will be the end of this we know not; but the sole cause 
of this great movement is the condition of labor above described, and the object 
of this revolution is the restoration of labor to its rights. 



300 DIFFERENCE IN COST OF MONEY AND LABOR 

erb, makes money. When you have got a little, it is easy to get 
more. The great difficulty is to get that little." Alas for the labor 
of Europe ! It has much to do, a great battle to fight, " to get that 
little." Fortunate for the masters of Europe — however unfortu- 
nate for mankind — that they have got all. There is nothing cre- 
ated by the labor which they control, which does not come into 
their hands. Hence the gigantic structures of concentrated power 
which Europe presents, like the everduring pyramids of Egypt, 
both created by the same means, the command and control over 
human labor. Hence the elevated and inapproachable spheres of 
portions of European society, walled up and defended by innumer- 
able guards, and intrenched by every conceivable means of power. 
The secret of all these fortified and impregnable positions, of the 
affluence and pomp in which a small portion of European society 
moves, and of the power with which they are surrounded, is the 
degradation and oppression of the laboring classes — depriving 
them of their rights, and robbing them of two thirds of the fair re- 
ward of their toil — withholding from them all compensation ; for 
bare subsistence can not, in any propriety, be regarded in the light 
of compensation. 

It is power thus acquired, which supports the expensive gov- 
ernments of Europe; which maintains its armies, its navies, its 
religious establishments ; which fortifies rank in every position 
above the grand substratum of labor ; which entrenches the com- 
mercial millionaire in the centre of his vast accumulations ; which 
endows nobility with its immense estates, and with its high pre- 
scriptive rights ; and which surrounds and protects the thrones 
from which emanates the authority to exercise this power. There 
is nothing of greatness, of power, of wealth, of distinction, or in the 
forms of either, as exhibited in the European world, which is 
not in part, in a very large part, composed of the wrongs done to 
labor. This is as inevitably true as the fact that labor in Europe 
is deprived of two thirds of its fair reward, and can only be proved 
otherwise with the disproof of this fact. 

It can not but be seen that the bearing of- this difference in the 
cost of money and labor in the United States and Europe, on a 
system of public economy for the United States, is direct, potent, 
and sweeping. It is two to one in the producing powers of Eu- 
rope and other foreign parts against the producing powers of the 
United States, it being assumed that money and labor are the active 
powers employed. All the other powers which lie back of these 



IN EUROPE AND IN THE UNITED STATES. 301 

as a basis, exist in a like proportion of force in these quarters rela- 
tive to each other. It is a practical commercial principle, that is 
now under consideration — a principle that operates uniformly all 
the world over, and which never fails to be energetic in accom- 
plishing its results. It is the principle of competition in trade. 
Every merchant in New York, or in any other city, or in any other 
place, knows, that he can not stand against a competitor, who can 
sell goods at a profit for less than what his goods of the same kind 
cost him. He is ruined by the competition, if he continues 
it. The principle is the same in its application to nations as to 
individuals. 

With the wide margin of a power of three to one in labor, and 
of three to two in money, or of two to one in both, in favor of Eu- 
rope against the United States, it must be seen, that a small fraction 
of the power of this difference, added to that which is equal to the 
entire power of the United States, and brought skilfully and effec- 
tively to bear on any one point of the rival interests of this coun- 
try, will crush us in that particular, and in every other when like 
attempts are made, unless we have an American commercial sys- 
tem, such as is described in another chapter, to defend us. Eu- 
rope, of course, will never use the whole of the power of this 
difference against us. It would not be necessary to gain her end. 
A fraction of it will do. And in all particulars in which it is done, 
she has us entirely in her power, and may command her own prices 
for all that we are thus forced to buy of her. It is in this way, 
that we pay dearer under Free Trade than under Protection, for 
the same articles, besides the abstraction of the cost from the coun- 
try, and the suppression, in a like amount, of American labor 
and trade. 



302 THE CLAIMS OF AMERICAN LABOR FOR PROTECTION. 



CHAPTER XX. 

THE CLAIMS OF AMERICAN LABOR FOR PROTECTION. 

Difference in the social Position of Labor in Europe and America. — It is a Commercial 
Principle, that requires the Protection of American Labor, and therefore imperative. — 
The Rule of graduating Protection.— How Foreign Policies bear on the vulnerable 
Points of the United States. — British Free Trade a Protective Policy. — The Abatement 
of Duties in Great Britain requires Increase, rather than Diminution, in the United States, 
because it is made for Protection. — Importance of Skill in Public Economy, to Amer- 
ican Statesmen. — The Advantages of Free Labor over Slave Labor. — European Labor 
in a like Position with Slave Labor. — The best Rule for Protection is. that they who 
ask for it, should have it. — Adam Smith's Argument for Free Trade, is One for Protec- 
tion. — He concedes and begs the (Question. — Adam Smith and Daniel Webster, as to the 
Effect of increa-sed Investments of Capital in producing Establishments, on Labor, and 
on the Profits of Capital. — The United States can never dispense with Protection, -so long 
as Money and Labor here cost more than elsewhere. — The Cry of " Monopoly." — Dem- 
agogues. 

Labor is the only thing, in the United States, that requires pro- 
tection ; or in the protection of labor, all things else that need it, 
are also protected. It may be, and doubdess is, otherwise in Eu- 
rope, SO long as they propose to maintain their state of society. 

European economists have never invested labor with the attri- 
butes, nor placed it in the position, of capital. We differ from 
them in this, not only by doing what they have not done in this 
particular, but by making it the parent of all other capital, as shown 
in a preceding chapter. What they call capital, and which is 
commonly so called, is placed by them, not only first as to the 
dignity of its position, but first and chief as the great commercial 
agent of the world. Labor is thrust by them into an abject condi- 
tion, and made to sustain a servile relation to capital. The legisla- 
tion of Europe corresponds with this. All attempts of labor there, 
particularly in Great Britain, by association and combination, by 
trades-unions, and by strikes, to rise and assert its rights, have 
always been visited with legal penalties for their suppression ; 
whereas, the association and combination of capitalists for their 
mutual advantage, and to fordfy their position against these strug- 
gles of the laboring classes, are not only tolerated, but legalized 
and protected. Enough has already been said, in former chapters, 
to show the degradation, the hardships, the deprivations, and the 
miseries of European labor. Capital is the great thing there ; la- 



THE CLAIMS OF AMERICAN LABOR FOR PROTECTION. 303 

Dor is the great thing here. Capital there is the only thing thought 
of in the institution and support of a protective system ; labor here 
is the only thing that requires protection. Capital there is a great 
political power ; labor here occupies that position, and may prop- 
erly be called the great power of the country ; whereas, labor in 
Europe has little or no power; and as to protection, it has none, 
but is made the slave of capital- — is the slave of society. In Eu 
rope the fruits of labor, that is, the accumulations of commercial 
vakies, have been wrested from the hand that created them, and 
not only appropriated to the use of the spoilers, but is employed by 
them to fon.-e the producers of this great wealth to go on producing, 
chiefly for the benefit of those who have done the wTong. The 
producers are held in a servile relation to their own creations, and 
by the application of misnomers in public economy, the world is 
made to beUeve, that capital is the first and great thing ; that capi- 
tal occupies the position of the mainspring of society ; and that 
labor is indebted to capital, the work of its own hands, to save it 
from starving. Thus the natural order of things is reversed, and 
the fundamental and most important relations of human society are 
overturned. By the studious use and persevering application of 
misnomers for centuries, and by the general consent of mankind, a 
grand heresy to nature has taken the place of her own teachings, 
and acquired the authority of orthodox belief, by default and weak- 
ness of the injured party. Nevertheless, the truth of the case only 
.ies in abeyance, and flashes forth in full blaze the moment it is 
challenged. There is not probably a reader of this work, who, 
though he may never have thought of it before, though he may 
have adopted directly the opposite opinion, and cherished it all his 
life, will not confess, that labor, and not capital, is the original and 
fundamental power of society and of the commercial world ; that 
it is itself capital, and the parent of all other capital — the parent of 
all commercial values. 

We proceed to observe, that it is a commercial principle that 
invokes Protection for American labor. And because it is so, it 
can not err, is infallible, imperative. The principle grows out of 
the facts already established, to wit, that the average cost of labor 
in the United States is three to one of the average cost in Europe 
and other foreign parts, with which we have commercial intercourse. 
It has been shown, indeed, that the difl^erence is greater than this ; 
but this is sufficient for the argument. It has also been shown, 
that the value or cost of money, and of all other capital, in the 



304 THE CLAIMS OF AMERICAN LABOR FOR PROTECTION. 

United States, is in the same proportion greater than the value or 
cost of the same things in foreign parts. This must necessarily be 
true, because every species of property, money and other, is bought 
by labor, is its product, and is therefore estimated by the cost, or 
price, or quantity of labor. • But inasmuch as money-capital is the 
common currency of the commercial world, it is allowed, that it is 
fairly worth more than other capital in proportion to its cost ; and 
notwithstanding that this allowance applies equally to the United 
States as to foreign parts, it is nevertheless proposed, as a boon to 
opponents, to rate the money of Europe, in this argument, as two 
to three of the money of this country, in its cost, and consequently 
in its value. This, as before determined, makes the joint cost of 
money and labor in Europe as one to two of their joint cost in the 
United States ; or the diiFerence is one hundred yer cent, in favor 
of Europe against the United States, in these two things as produ- 
cing powers in both quarters. 

It is convenient to represent these two agents as the common 
producing powers in combination all the world over, inasmuch as 
money is the representative of every other species of capital as a 
common currency for them all; and inasmuch as money and labor 
are the agents usually brought together for purposes of production. 
It will be seen, therefore, on these premises, as before shown, that 
the producing powers of Europe are at least two to one in force — 
they are in fact greater — against the producing powers of the Uni- 
ted States, because they cost only half as much. 

Suppose two merchants side by side in New York, or in any 
other city or place, trading in the same articles, and that these arti- 
cles cost one of them twice as much as they cost the other. Which 
has the best chance in open and free competition ? Which will 
beat ? Which will fall before the other ? It is plain enough, that 
the one whose articles cost twice as much as those of the other, 
must shut up shop. He could not stand, even though the differ- 
ence in the cost of his articles be less than 100 per cent. ; though 
it be 50 ; though it be 25 ; though it be 10 ; though it be 5 per 
cent. If there be a vigorous and determined competition, he might 
fall, and be driven out of the market, with a difference of 2 or i 
per cent. ; or even of one half-cent per cent. Such is the force 
and effect of competition between private persons in the same mar- 
ket ; and such precisely is the force and effect of competition be- 
tween commercial nations, the aggregate of whose trade with each 
other is always made up of private and independent transactions, 



THE CLAIMS OF AMERICAN LABOR FOR PROTECTION. 305 

as in the case above supposed. That party will always beat, 
which can afford to sell cheapest, by reason of a less cost of the 
articles brought into market. 

Thus, from the operation of an infallible commercial principle, 
which never varies in its results, and which can not lead to error, 
the producing powers of Europe, which cost one, must inevitably, 
on a platform of Free Trade, overwhelm the producing powers of 
the United States, which cost two, and drive the latter from the 
market that is open to both on the same terms, except as the latter 
should consent to trade at ruinous prices. In either case it would 
be ruinous. 

The importance of anticipating our opponents, whenever this 
point is presented, must be our apology for repeating here, as we 
not unfrequently have occasion to do, that we are aware this argu- 
ment may be seized upon as an admission, that Free Trade would 
cheapen articles to consumers, and that Protection enhances prices. 
But we have shown elsewhere, as often remarked, that, while the 
above argument is sound and irrefragable, this conclusion does not 
follow; and that European and other foreign factors, once admitted 
to our market on the principles of Free Trade, always raise prices 
above what they are under a system of Protection, as soon as they 
get possession of the market by driving Americans out. While it 
is true, that without Protection, they are able to break Americans 
down, it is not true, that having broken them down, they will con- 
tinue to sell cheaper; but they invariably demand and realize 
higher prices than those which prevail under a protective system ; 
so that the evils of Free Trade to this country are threefold: First, 
by destroying a part of the business of the people and preventing 
its increase ; next, by raising the prices of the articles, the domestic 
production of which has been suppressed or prevented ; and third- 
ly, by banishing specie, to the amount paid for them, from the 
country, which would otherwise be retained as a part of our do- 
mestic wealth, to be used as "tools of trade" for the augmentation 
of wealth. This last evil may be greater or less. It may be suffi- 
cient to bankrupt the whole country, and has several times done so, 
as is shown elsewhere in this work. 

We proceed to consider how the rule of protection is to be 

ascertained, and on what principle it should be graduated. At 

first sight, it might perhaps seem that it should be graduated by the 

difference in the cost of money and of labor in the United States 

20 



306 THE CLAIMS OF AMERICAN LABOR FOR PROTECTION. 

and other parts, that is, one hundred per cent, or more. But 
when it is considered that the chief aim of European and other 
foreign governments, in robbing their laboring classes of an average 
of two thirds of the visages which they are justly entitled to receive, 
as a freedom value, is to appropriate it to their own use and bene- 
fit ; or rather, that society in those quarters is constituted with the 
design of having this two thirds of the fair wages of labor absorbed 
by the government and higher classes ; it will then be seen that the 
object of this deprivation of the rights of labor would be subverted, 
and that these unjust governments w^ould gain no advantage to them- 
selves, if they were to employ all this power, that is all the differ- 
ence in the cost of money and labor between them and such a coun- 
try as the United States, in the struggles of commercial competi- 
tion. They can not afford it in their state of society. But hav- 
ing the power always in their hands, to use such a portion of this 
difference as may be necessary to bear most effectually on the 
weak and vulnerable points of free states, that is, such points as 
are not protected, and on those interests which are of most impor- 
tance to themselves, they will of course select those points of at- 
tack on which to make, in the way of competition, such sacrifices 
as policy may dictate, and by which they can accompHsh the most 
with a given amount of this species of negative expenditure, in 
the expectation of being indemnified by profits accruing from high 
prices, after competition may have been subdued for want of ade- 
quate protection in the country or countries with which they are 
carrying on this commercial warfare. They know too well how 
to economize such transient sacrifices, in order to attain their 
objects. 

For example: It need not be said, that the manufacture of cot- 
ton in Great Britain, is to her a thing of vital and supreme impor- 
tance. Before she had a rival in us, she taxed the raw material 
heavily. From 1809 to 1814, her duty on the imports of raw 
cotton was 255. Q>d. per cwt., or 5J cents a pound, almost equal to 
its present price. But from 1815 to 1819, afler we began to man- 
ufacture cotton, down came the duty to 85. 6J. per cwt., or nearly 
2 cents a pound. At last it got down to y\ of a penny ; and in 
1845 it was found necessary to remove it altogether. This was a 
sacrifice to her revenue ; but it was necessary to retain her ascen- 
dency against the competition in the manufacture of this article in 
the United States and elsewhere. She let in raw cotton free in order 
to protect herself and her manufacturers — which has been mis- 



THE CLAIMS OF AMERICAN LABOR FOR PROTECTION. 307 

named Free Trade. In the same manner, all the abatements in 
her tariff of duties on imports, under the administration of Sir Rob- 
ert Peel, as shown in note, pp. Ill, 112, without a single exception, 
together with the abolition of the corn-laws, were made on the 
principle of protection, and for purposes of protection ; and they 
are called Free Trade. It was to maintain her commercial posi- 
tion in relation to competitors in other countries, that she made 
these sacrifices of revenue — which, however, were very trivial, 
and were more than made up in the increase of revenue from du- 
ties on other articles. (See note above referred to.) 

All other applications of this principle may easily be understood 
by the above illustrations, as these are directly in point. Those 
governments which oppress labor by depriving it of reward, and 
by merely granting it subsistence, do not expend all the power 
they acquire by this means in commercial competition with free 
states for the purpose of gaining the same advantage over labor in 
such foreign parts. A small fraction of this power skilfully applied, 
will answer all their purposes, as the examples above referred to, 
in the action of the Brhish government, will show. 

But it may be observed that tlie amount or measure of protec- 
tion required in a stale or nation that is acting on the defensive, in 
order to secure the rights of its laboring classes against such at- 
tacks, must exceed very much the amount or measure of sacrifice 
that is made by the assailing party, inasmuch as it may be pre- 
sumed that the first sacrifices made by such a party, are but a 
small part of that which it can afford to make, and will make, since 
it has begun the contest, if necessary to success. In the United 
States, it is absolutely necessary that our public men, our states- 
men, who legislate on these and other matters, should thoroughly 
understand this subject, and that they should be able to see, with 
unerring certainty, what measure of protection may be required for 
any particular article, and for all articles, against these attacks; and 
they ought to know — they will be liable to the greatest mistakes 
if they do not know — that the abolition of a duty in a foreign 
state may be as much a measure of protection as is the imposition 
of duties for that express object, as in the case of all the abate- 
ments and abolition of duties which have recently taken place in 
the tariff of Great Britain. The sacrifices made in such cases, are 
not positive, but negative, for a reversion of benefits. It is merely 
a transient reduction of the taxes on labor at home, for the sake 
of obtaining a stronger hold on labor abroad, in the expectation o/ 



308 THE CLAIMS OF AMERICAN LABOR FOR PROTECTION. 

a return, not only of the principal, but of compound interest, or it 
may be interest equal to a geometrical ratio. 

The ignorance of these facts and principles, which, for some 
twenty years past, with little interruption, has been demonstrated 
by those who have chiefly controlled the legislation of the United 
States on this point of public policy, is not more amazing than 
alarming. To call it ignorance, is most charitable. Otherwise, 
their influence and acts would be in the highest degree criminal. 
They evince that they have borrowed their theory of public econ- 
omy from foreign parts and foreign schools ; that they have re- 
ceived their lessons from the enemies of the country ; and that 
they are utterly incapable of understanding the subject. This is 
not saying too much, for their reasonings and arguments prove it. 
Presidential messages. United States treasury reports, such as those 
of December, 1845, '6, and '7, and other public documents, have 
been constructed on these borrowed and fallacious arguments, and 
legislation, the most momentous and most unfortunate, has been 
made to conform to this false theory, so fatal to the interests of 
American labor and of the American people. 

But there are domestic considerations in the United States 
which should enter into the graduation of the rule of protection, in 
addition to those arising out of the difference between the cost of 
money and labor in this country, and their cost in those countries 
with which we trade. A country where labor is free and inde- 
pendent, and realizes a fair compensation as a consequence of its 
independence, possesses inherent advantages over countries where 
labor is not free, other tilings being equal. Take for example the 
free and slave states of this Union. The great secret of the differ- 
ence in .prosperity in the free and slave states, consists more in the 
fact that labor is free in one and not in the other, than in any or all 
other causes ; and the slave states would probably soon be driven 
to universal emancipation, from interest, but for the monopoly of 
southern staples, in the raising of which northern free labor can 
never come in competition. Men who are their own property, 
who work for themselves, and whose fortunes are of their own 
creation, with the existing chances before them of rising in the 
world, and becoming men of 'estate, of wealth, and of influence, 
are a very different sort of moral and physical machine, from men 
who know they are not their own, and who always feel that they 
are working for masters, and not for themselves. With the former, 
abor is a pleasure ; with the latter, it is a task. The freeman 



THE CLAIMS OF AMERICAN LABOR FOR PROTECTION. 309 

works for reward; the slave because he is driven to it; and the 
difference in the results, as to their commercial values, is as great 
as in their feelings and motives. There is very little difference in 
the position and character of the labor of European nations, as to 
its physical effectiveness resulting from moral incentives, and that 
of slave labor in the United States. Both are forced, and both are 
about equally well provided for, that is, furnished with a subsistence 
designed to keep them in the best working order. 

All slave labor in the United States, which is not applied to the 
production of what are commonly called slave-grown staples, stands 
more in need of the protection of a national policy, so far as the 
interest of masters is concerned, than free labor, because slave la- 
bor is more costly than either its foreign or domestic competitor, 
when regarded in connexion with the comparative amount of its 
product. The foreign competitor, called free, has to raise itself till 
fit to work ; gets only a bare subsistence while it can work ; and 
when it can work no longer, it is cast off to perish ; whereas, slave 
labor is always a cost : a cost in raising, a cost in sickness, a cost 
after it has done working ; and its product, while working, is greatly 
less, because it wants the motive of working for itself. And it has 
already been proved by experience that slave labor is generally 
obliged to retire before American free labor, when both are en- 
gaged in producing the same things. If, therefore, American free 
labor requires protection against foreign pauper labor, much more 
does American slave labor require it, for the interest of its owners. 
The labor of the ox and that of a slave occupy the same position in 
public economy ; but the latter is less able to stand against competition. 

Adam Smith says : " The experience of all ages and nations, I 
believe, demonstrates that work done by slaves, though it appears 
to cost only their maintenance, is in the end the dearest of any." — 
*' The planting of sugar and tobacco [that of cotton in America 
was not then known] can afford the expense of slave cultivation." — 
" The profits of a sugar plantation in any of our West India colo- 
nies, are generally much greater than any that is known in either 
Europe or America ; and the profits of a tobacco plantation, though 
inferior to those of sugar, are superior to those of corn. Both can 
afford the expense of slave cultivation." This was written anterior 
to 1775. The cultivation of cotton in the United States was com- 
menced in 1790, and has grown up to a stupendous interest for the 
profitable employment of slave labor, without any rivalship in froe 
labor. 



310 THE CLAIMS OF AMERICAN LABOR FOR PROTECTION. 

But it is free labor, chiefly, that has created all the superiority 
of the United States over other countries, in its general capacities 
of wealth. There are, indeed, vast resources and treasures of na- 
ture here. But it is the free labor and free spirit of the country 
which have turned them to profitable account. It is free labor 
vi^hich, while unembarrassed with vicious and favored with wise 
legislation, rolls up wealth in heaps. But for this, and but for the 
fact, that European and other foreign powers, which wrest from 
labor so large a portion of its reward, can not afford to employ all 
the power thus wrongfully acquired in commercial competition 
with us ; but for these facts, we say, the measure of protection for 
American labor, naturally required, would be the difference in the 
cost of money and labor in these two quarters, not less than an 
average of one hundred per cent. But the average protection 
which experience has dictated as necessary, as for example in the 
tariff of 1842, is about 40 per cent. The reasons why protection 
is required to be distributed so variously in its degrees, on different 
articles of domestic production, are, first, because the power of for- 
eign competition, as seen above, is brought to bear more on some 
articles than on others; and next, because some domestic produc- 
tions have acquired a stronger position than others, and do not 
need so much help. Hence, in a well-digested tariff, we find Pro- 
tection varying from a very low up to a very high rate ; and noth- 
ing could be a stronger evidence of the correctness of the principle 
involved in the rule laid down, to wit, that the necessity of Protec- 
tion arises from tUe difference in the cost of money and labor in this 
country and others, than the facts above noticed. 

Although, therefore, as above recognised, this difference between 
the cost of money and labor in Europe and their cost in the United 
States, can not be laid down as an exact rule by which protection 
is, in all cases, to be graduated, it is, nevertheless, the foundation 
of the rule. It is remarkable, that a principle, like this, so potent 
and overruling, should not have been more influential with Amer- 
ican statesmen, as one from which there is no escape in the current 
of public affairs. There is no law in the everlasting code of nature, 
that is more certain than this, and none the penalty of which must 
more certainly be paid, if violated. 

It is due, however, to the instincts of the common mind, to ob- 
serve, that the people of this country have not been altogether 
insensible of a natural hostility between their labor and what is 
commonly called "the pauper labor of Europe." The whole of 



THE CLAIMS OF AMERICAN LABOR FOR PROTECTION. 311 

the truth lies in this instinctive apprehension. It has been in their 
mouths as long as the oldest man can remember. It was in the 
minds and hearts of the revolutionary fathers, and stimulated them 
to all their mighty efforts, to their stupendous sacrifices, and to 
those strifes of arms which achieved so great a victory. The 
American people have generally felt, that Europe is a great prison- 
house of labor, the products of which, if brought in direct and open 
competition with their own, would drag them down to the same 
level, and subject them to the same disadvantages — ultimately to 
the same poverty, wretchedness, and slavery. 

Nor can it be said, that some of the public men of this country, 
politicians, statesmen, and others, have not apprehended this great 
truth, preached it eloquently, set forth its operations and results, 
and warned the people. 

But hitherto the field of debate has been wide, the materials of 
argument disjunct and scattered, and foreign authorities, based on 
fallacious and unsound principles, have been forced upon public 
attention, to distract, divide, and conquer. American schools and 
colleges, having nothing else to lay before their pupils — ^the tutors 
of which may without offence be supposed better skilled in teach- 
ing boys than statesmen, and not perhaps thinking that they were 
educating statesmen — have been forced to rely on Adam Smith, 
David Ricardo, Jean Baptiste Say, and such like, for lessons on 
pubHc economy ! 

It would be strange, however, after so much debate, and where 
such vast interests are at stake, if the argument could never be 
brought to a point, on which all could see thM the truth of the 
matter hinges. That point, it is believed, is inditated by the differ- 
ence in the cost of money and labor in the United States and in 
foreign parts. It is a commercial principle, determined with all 
the certainty of arithmetical results, about which, therefore, there 
can be no ground of controversy among reasonable minds. The 
rule is derived from the fact, that the producing powers of Europe 
and other foreign parts, that is, money and labor, cost only half as 
much as in the United States — in truth less than half as much. 
It will follow, therefore, that American labor, which in fact is the 
chief thing concerned, can never stand against such odds without 
protection. 

But a better rule than all, perhaps, for the graduation of duties 
for Protection, is the application and advice of parties who desire 
it It is the experience of the people that teaches what they want, 



312 THE CLAIMS OF AMERICAN LABOR FOR PROTECTION. 

and they are the best judges. They never ask for protection, un- 
less they want it. Why should they ? It would be absurd. And 
the fact that they ask, is proof thai they want. 

The following argument of Adam Smith, made for Free Trade, 
is so pertinent and forcible here, that we can not resist the tempta- 
tion of using it for our own purpose : " The annual revenue of 
every society is always precisely equal to the exchangeable value 
of the whole annual produce of its industry, or rather, is precisely 
the same thing with that exchangeable value. As every individual, 
therefore, endeavors, as much as he can, both to employ his capi- 
tal in the support of domestic industry, and so to direct that indus- 
try, that its produce may be of the greatest value; every individual 
necessarily labors to render the annual revenue of the society as 
great as he can. He generally, indeed, neither intends to promote 
the public interest, nor knows how much he is promoting it. By 
preferring the support of domestic to that of foreign industry, he 
intends only his own security ; and by directing that industry in 
such a manner that its produce may be of the greatest value, he in- 
tends only his own gain; and he is in that, as in many other cases, 
led by an invisible -hand, to promote an end which was no part of 
his intention. Nor is it always worse for the society, that it was no 
part of it. By pursuing his own interest, he frequently promotes 
that of the society more effectually than when he intends to promote 
it. I have never known much good done by those who affect to 
trade for the public good. It is an affectation, indeed, not very com- 
mon among merchants, and very (ew words need be employed in 
dissuading them from it. What is the species of industry which his 
capital can best employ, and of which the produce is likely to be 
of the greatest value, every individual, it is evident, can, in his local 
situation, judge much better than any statesman or lawgiver can do 
for him. The statesman who should attempt to direct private peo- 
ple in what manner they ought to employ their capitals, would not 
only load himself with a most unnecessary attention, but assume an 
authority which could safely be trusted, not only to no single per- 
son, but to no council or senate whatever, and which would no-r 
where be so dangerous as in the hands of a man who had folly and 
presumption enough to fancy himself fit to exercise it." 

Nothing, surely, could be more delightful than this to those 
Americans who only ask to be protected in their own chosen ways 
— a protection to which they are justly entided. Adam Smith en- 
tirely misrepresents the case, when he assumes, that Protection is 



THE CLAIMS OF AMERICAN LABOR FOR PROTECTION. 313 

an '' attempt to direct private people in what way they ought to 
employ their capital." It only encourages and shields them from 
harm, in ways in which they themselves choose to " employ their 
capital." In no case does Protection control the direction and em- 
ployment of capital ; it only invites it into a field where it could not 
otherwise go, and defends its position there. Its function is to do 
that which is solicited, not to impose that which is not desired ; and 
when it is shown, as we have done, that no parties can possibly be 
injured by the protection of others — except by a partiality in the 
distribution of its benefits, in helping one more than another, since 
all are benefited in some degree by protection afforded in any cases 
whatever — this reasoning of Adam Smith all goes for a protective 
system. When the people desire and obtain protection in this, 
that, or the other pursuit, for their " own gain," they are, as Adam 
Smith justly says, " led by an invisible hand, to promote an end 
which was no part of their intention," to wit, the common good of 
" the society." Nothing is more true, than that " every individual 
can, in his local situation, judge much better than any statesman or 
lawgiver can for him, what is the species of industry which his cap- 
ital can best employ, and of which the produce is likely to be of 
the greatest value ;" and therefore he asks protection in it, if he 
needs it. This is the opposite of directing and controlling his 
capital. The objection, that it indirectly controls other parties, to 
their injury, we have answered in another place, by showing that 
it controls only the importing merchant, to prevent his trading at 
the expense of the country, the very thing which ought to be done. 

It is only when the government interferes with and dictates to 
the pursuits of the people, as, for example, forcing them back to 
agriculture, by refusing to protect manufactures, that mischief, and 
untold mischief, is done. Let the people choose their own pur- 
suits, and protect them when they ask it, and they will be sure to 
promote the public, by securing their own private wealth. 

Adam Smith still farther concedes all that can be asked : " What 
is prudent in every private family, can scarcely be folly in that of a 
great kingdom." And what does the prudence of a private family 
require? To take care of its own interests, to be sure — to pro- 
tect them. If this be not done, things will surely come to bad ; 
and it must take care of those interests, too, in relation to the con- 
flicting agencies with which it is for ever invested and assailed. 
This is precisely the doctrine of Protection. 

It is singular that, in addition to all this, Adam Smith while 



314 THE CLAIMS OF AMERICAN LABOR FOR PROTECTION. 

pleading the cause of Free Trade, not only concedes, but justifies, 
the principle of Protection in all its length and breadth of applica- 
tion, as follows : " There seem, however, to be two cases, in which 
it will generally be advantageous to lay some burden upon foreign, 
for the encouragement of domestic industry. The first is, when 
some particular sort of industry is necessary for the defence of the 
country. The defence of Great Britain, for example, depends 
very much upon its sailors and shipping. The act of navigation, 
therefore very properly, endeavors to give the sailors and shipping 
of Great Britain the monopoly of the trade of their own country, 
in some cases by absolute prohibitions, and in others by heavy bur- 
dens upon the shippping of foreign countries." 

Let any one judge whether the principle here conceded can 
have any stopping-place, so long as, in the judgment of any people 
or government, *' any particular sort of industry," as Adam Smith 
calls it, requires protection for the defence of the country, alias, for 
its interests ; for, if its interests, in which its strength and power 
consist, are suffered to go to wreck, it is folly to talk about defence. 
There can be no defence short of maintaining that physical power 
of a country, which consists in maintaining its interests. 

" The second case," says Adam Smith, " in which it will gen 
erally be advantageous to lay some burden upon foreign for the 
encouragement of domestic industry, is, when some tax is imposed 
at home upon the produce of the latter. In this case, it seems rea- 
sonable, that an equal tax should be imposed upon the like pro- 
duce of the former." This on the principle of retaliation. So we 
have Adam Smith a protectionist on two points, which, as will be 
seen, is having him on all points : first, when " it will be advan- 
tageous for the encouragement of domestic industry ;" and next, 
when the lex tallonis, or law of retaliation, requires it. Who ever 
asked for more than this ? 

Let the following facts, the list of which might be greatly en- 
larged, show how far the United States would be entitled to go, on 
this principle of retaliation, laid down by Adam Smith. American 
flour in Cuba pays a duty of about $10 a barrel ; in Rio Janeiro, 
$5 to $6 ; and in many other foreign parts, the duties on this arti- 
cle range from 50 to 150 per cent. In return, we take coffee 
without duty. We have reciprocity treaties with several foreign 
powers, the effect of which has already been to take away about 
one third of our carrying-trade. When Americans began to ex- 
port their goods to British dependencies, the British government im- 



THE CLAIMS OF AMERICAN LABOR FOR PROTECTION. 315 

posed a duty against us, first of 5, next of 8^, then of 10^, and finally 
of 15 per cent., which, it is supposed, will be an exclusion. It is 
worthy of remark, that on the single staple of tobacco, which she 
receives from the United States, Great Britain levies an amount 
of duties about equal to the total amount of customs collected on 
all articles imported into the United States from all foreign coun- 
tries ; and also about equal to the total annual expenditures of our 
government. The Hon. P. Triplett, of Kentucky, made a com- 
munication to the committee on manufactures, in the 27th Con- 
gress, from which are deduced the following facts: that American 
products consumed in Europe pay duties on entering there, equal 
to Jialf o^ their entire value ; whereas, European products consumed 
in the United States pay duties here equal to oneffih of their value. 
In 1841, imports into the United States were $127,945,000, and ex- 
ports, $91,000,000. The duties raised from these imports amount 
edto $14,487,000, being about 11 J per cent.; whereas, the duties 
which foreign countries obtained from exports from the United 
States, of that year, amounted to $113,500,000, or 124 per cent. 
The average of exports of tobacco from the United States to Eu- 
rope, for 1839 and 1840, was $9,225,000 for each year ; and the 
average duties imposed for each year by European governments, 
was $32,463,000, or 350 per cent. The duties on American 
tobacco in Europe have been as high as $35,000,000 a year. 

But Adam Smith goes even farther, if it were possible. He 
says : *' As there are two cases in which it will generally be ad- 
vantageous to lay some burden upon foreign, for the encourage- 
ment of domestic industry, so there are two other cases in which 
it may sometimes be a matter of deliberation : in the one, how far 
it is proper to continue the free importation of certain foreign goods ; 
and in the other, how far, or in what manner, it may be proper to 
restore that free importation, after it has been for some time inter- 
rupted." Is not this truly astonishing ? Here is the whole field 
open, and opened by the hand of Adam Smith. *' It may be a 
matter of deliberation." About what? — First, as to what articles, 
now, or at any time, free, duties shall be put on to ; and next, as to 
what articles, now, or at any time, subject to duty, shall be made 
free. Is it possible to have a more extended discretion ? And 
the British government have always acted on this rule of " deliber- 
ation." We have shown that Sir Robert Peel's policy, in making 
some articles free, was precisely of this kind — not for Free Trade, 
but on "deliberation," according to Adam Smith's rule. 



316 THE CLAIMS OF AMERICAN LABOR FOR PROTECTION. 

Adam Smith and his followers are for ever begging the question, 
that Protection is a tax. We disprove it a thousand and one times, 
and there they are still, making the same asseveration, without deign- 
ing to offer evidence. 

We are inclined to believe, that a protective system operates the 
same in all countries, as in the United States. Take, for example, 
Dr.Bowering's report on Germany, to the British Parliament, 1840 
The German Zoll-Verein treaty had then been in operation some 
ten years. Dr. Bowering admits, that the German manufactures, 
which are protected by a high-tariff duty, are better, and sold on 
more reasonable terms, than the like foreign articles ; that the de- 
mand for agricultural products had increased, and the prices risen, 
under the high tariff; that land had risen from 50 to 100 per cent. ; 
that labor was better paid ; that the wages of labor, in the manu- 
facturing districts, had risen 30 per cent. The reason of admitting 
these facts, is understood to have been, that if the British corn-laws 
were not instantly abolished, Germany would become independent, 
and learn too much of the benefits of Protection. The Allgemeine 
Zeitung said in 1841, " Within these ten years," since Protection 
was established, " Germany has made the advance of a century in 
welfare and industry, in the feeling of self-dependence, and in na- 
tional energy." 

Another rule laid down by Adam Smith, viz., that " the general 
industry of the society can never exceed what the capital of the 
society can employ," as an element of his grand proposition of 
Free Trade, only shows, first, that tiiis is assumed in view of a 
given state of society, with which, peradventure, he was acquainted ; 
and secondly, that he was totally ignorant of the condition of things 
in America. In England, as it then was, probably, and is now it 
may be, this rflle might possibly apply ; but every one knows, in 
this quarter, it does not apply here. No man, in the United States, 
is necessarily dependent on " the capital of the society," for em- 
ployment. He can at any time go into the backwoods, and be 
perfectly independent; and it is because of this great open field, 
of this illimitable chance, into which multitudes are constantly 
pushing their way, and literally opening and creating a new world, 
thereby proving that anybody else can do it, that man, in this coun- 
try, is independent of capital — certainly of that species of capital, 
of which Adam Smith here speaks. It is not, therefore, true here, 
that "the general industry of the society can never exceed what 
the capital of the society can employ." This only proves, that^ 



THE CLAIMS OF AMERICAN LABOR FOR PROTECTION. 317 

however well Adam Smith may have been qualified to write a 
system of public economy for Great Britain, he was totally unquali- 
fied to write one for the United States ; and that his attempt to 
write for all nations, as if he could lay down principles and form a 
system equally applicable to all, was a very audacious one. 

The cry of " monopoly," which the arts of demagogues have sent 
barking over the land for a few years past, like a pack of hounds 
let loose on the scent of game, will be found to be not only without 
foundation, so far as it applies to the encouragement of American 
manufactures ; but it will appear, before w^e shall have done with 
the subject, that it is a direct persecution of American labor, hunt- 
ing it down, and injuring it first and chiefly. When a party asks 
protection for an American product, it is a mediate application of 
American labor for employment and reward, without expense to 
anybody, and with benefit to the public and to all parties ; for it is 
shown elsewhere, that protective duties, in the United States are 
not taxes, but the contrary. The capitalist, who comes with a pe- 
tition to government for protection in a specific enterprise, appears 
as the proxy of labor, asking for a position in which he can employ 
labor and pay for it ; and every new investment of capital, in a pro- 
ductive art, or pursuit, creates a new demand for labor, and tends 
to enhance its reward. No matter how great the profit of the 
investment. The greater it is, so much greater the benefit to labor ; 
and it is labor chiefly that is benefited by advantageous outlays of 
capital. Labor, on an average in the United States, as before 
shown, is worth at least 50 per cent, on itself as capital, the value 
of which never diminishes, but always increases, by the encourage- 
ment given to other capital to employ it ; and just in proportion as 
other capital finds encouragement under protection to extend its 
operations, does its own rate of profit decrease, while that of labor 
increases. This is a settled principle. It is the effect of the rival- 
ship of capital in different hands. Large profits of capital in any 
employment, not invested with exclusive privileges — which alone 
constitute a monopoly — are like a vacuum in nature. Other cap- 
ital immediately rushes to the point, till there is a surfeit. The 
fact of large profits can not endure — must necessarily be transient. 

x\dam Smith says : " As the quantity of stock [capital] to be lent 
at interest increases, the interest [profit] necessarily diminishes. As 
capitals increase in any country, the profits which can be made by em- 
ploying them necessarily diminish. There arises, in consequence, 
a competition between diff*erent capitals. The owner of one must 



318 THE CLAIMS OF AMERICAN LABOR FOR PROTECTION. 

not only sell what he deals in somewhat cheaper, but, in order to 
get it to sell, he must sometimes too buy it dearer. The demand 
for productive labor, by the increase of the funds which are des- 
tined to maintain it, grows every day greater and greater. Labor- 
ers easily find employment, but the owners of capitals find it diffi- 
cult to get laborers to employ. Their competition raises the wa- 
ges of labor, and sinks the profits of stock. But when the profits 
are in this manner diminished, as it were, at both ends, the rate of 
interest must necessarily be diminished with them." 

The Hon. Daniel Webster says: " The increase of the invest- 
ments of capital in great works, tends to reduce the profits on that 
capital. That is a necessary result. But then it has exactly the 
reverse action upon labor. For the more that capital is invested in 
the great operations, the greater is the call for labor ; and therefore, 
the ratio is here the other way, and the rates of labor increase as 
the profits of capital are diminished." — (His speech in Senate, 
on the 25th of July, 1846.) It is impossible that investments of 
capital which employ labor should be multiplied or extended to 
the disadvantage of labor, and it is always for the interests of la- 
bor that protection should be granted, if necessary, to secure the 
end of such investments. Whenever capital invokes it, it is the 
same thing as if labor invoked it; and the fact may always be 
taken as the measure of graduation required by the interests of 
labor in fixing protection. 

As labor occupies the position of parent to all other capital, it 
would seem to be very fair, that this thing of its own creation 
should be employed for its own benefit ; and when the benefit can 
be made reciprocal, it is all the better and more satisfactory. When- 
ever capital asks for protection in any specific investment, for the 
creation of home products of any kind, against foreign competition, 
it is always identical with the demand of home labor for employ- 
ment and reward. The protection is that of labor, ultimately and 
chiefly. " Capital," says the Hon. Abbott Lawrence, "has usually 
had the power to take care of itself, and does not require the aid 
of Congress to place it in any other position, than to put the labor 
in motion. Congress should legislate for the labor, and the capital 
will take care of itself." 

Some have supposed that American arts and other pursuits may, 
under a system of protection, ultimately attain to such perfection 
and strength as no longer to need protection. They seem to im- 
agine that protection is only needed to get well started. No doubt, 



THE CLAIMS OF AMERICAN LABOR FOR PROTECTION. 319 

for the reason already noticed, viz., that a free country, where labor 
is rewarded, has many inherent advantages over those whose labor 
is not free, and is not properly rewarded; — for this reason it is 
doubtless true that the United States, after a long-protracted enjoy- 
ment of an adequate system of protection, would be able to run a 
powerful race with the European nations on a Free-Trade platform. 
But still it must be seen, that so long as the conditions of society 
in these two quarters are so greatly diverse as to create and main- 
tain a difference of a hundred per cent., in favor of Europe and 
against this country, in the cost of money and labor, the contest 
would be most unequal ; and while this difference exists, it is impos- 
sible for any one reasonably to conclude, that the necessity of pro- 
tection will not also exist, however perfect may be the state of 
American arts and instruments of labor, and however strong their 
position. Justice alone would seem to require it. 

It has been most unfortunate for this country that -demagogues, 
the greatest scourge of humanity, have been able to take advan- 
tage of the natural jealousies existing in the hearts of the poor 
against the rich, and of the unprosperous against the prosperous, 
by exciting in the minds of the former a belief, that the very means 
of their comfort and happiness, and their chances for the im- 
provement of their condition, are adverse to them, and the means 
of depriving them of their rights. As above shown, when capital 
asks for protection, it asks it in the name and for the- benefit of la- 
bor, to increase the demand for it, and to give it better chances ; 
and as above shown, the profits of capital diminish as the demand 
for labor and its reward are increased. The rivalship of capital is 
the harvest of labor. The more the protection of government en- 
courages new investments of capital in forms to employ labor, so 
much better will be the condition and prospects of the laboring 
classes. For the want of such protection, laborers are injured ; 
with it, they are benefited ; for it is their protection chiefly ; they 
are the party most deeply interested. And yet the demagogues of 
the country, by appealing to the natural jealousies of the people, 
have, to a great extent, made them believe, by misrepresentation, 
that capitalists, occupying such a position, under the protection of 
government, as to employ labor, and afford it better chances, are 
** monopolists," invested with and using a power to oppress labor, 
and to oppress the poor. Strange as it may seem, everybody 
knows that this is a fact. The poor laborer is made to believe, by 
ingenious falsehoods addressed to his natural jealousies, that they 



320 THE CLAIMS OF AMERICAN LABOR FOR PROTECTION. 

who give him employment, and afford him the means of Jiving — 
of rising in the world — are his natural enemies — his oppressors; 
and that the greater the demand for his labor, and the greater his 
reward for it, so much greater his misfortnne. 

They who are ingenious enough to invent such a fallacy, are 
sufficiently corrupt and unprincipled not to employ the falsehood. 
They can not but know it is false. They can not but know that 
any degree of protection which augments investments of capital in 
any specific enterprise, and which enlarges competition, is so far 
from creating a monopoly, that it is the very vv^ay to break it down, 
if it had existed before. 

In such a community as the United States, wealth is generally 
accumulated by the labor, industry, enterprise, frugality, and other 
like virtues of those who began life poor, and rose from an humble 
condition. In the absence of the laws of primogeniture and en- 
tails, large accumulations of wealth rarely descend to the third 
generation before they are dissipated, and fall into the hands of 
those who, in their turn, are rising to affluence from nothing, by 
their virtues. The American wheel of fortune is thus constantly 
turning roimd, so that the descent of those at the top, brings up 
those at the bottom. It is the investment of capital for the employ- 
ment of labor, that enables those at the bottom to rise ; and the 
larger and the more multiform the investments, so much better will 
be their chances, and so much more rapid their ascent. But these 
demagogues, putting their hand to this wheel, and crying out to 
those at the bottom to look at those at the top, screaming " mo- 
nopoly," merely to excite their envy and discontent, stop its revo- 
lutions, and keep both where they were. In the meantime, the 
foreigner gets rich out of the sweat of the American laborer's 
brow, while all things at home remain in statu quo. The dema- 
gogue will not allow American wealth to employ American labor, 
at American prices ; and as a consequence, it is obliged to sell 
itself in the European market, at European prices ; while the 
things it gets in exchange from Europe, as is shown in another 
place, are higher than they would be under a system of protection 
at home. In this way American labor is a loser twice over — 
thrice, indeed : First, by being robbed of that employment which 
gives fair wages ; next, by being dragged down to a level with 
European labor; and last, not least, by being knocked off from the 
American wheel of fortune, and deprived of all its chances. The 
last is an utter extinction of the hopes of rising. 



THE CLAIMS OF AMERICAN LABOR FOR PROTECTION. 321 

The very charge brought against capitalists, viz., the crime of 
being rich, is that which makes them a blessing to labor, while they 
are willing to employ it. They who put obstacles in the way of 
this relation, by refusing that protection which is necessary to it, 
are the enemies of labor. Besides being vicious, they are stupid, 
and do not think, that, in preventing the investment of American 
capital in a way to employ American labor, they only stimulate the 
use of foreign capital and the employment of foreign labor, to 
supply the same wants which might be supplied from domestic 
sources ; and that, in keeping money out of the hands of Ameri- 
cans, they put it in the hands of foreigners, banishing so much 
capital from this country, to replenish foreign exchequers, to 
augment the splendors of foreign aristocracies, and the power 
of foreign despotisms, all at the expense of the American people. 
In attempting to cripple American capitalists, they not only cripple 
and impoverish American labor, but enrich foreign capitalists and 
foreign factors, and put additional millions into the coffers of for- 
eign millionaires, all drawn from the hand of American toil. 
21 



BALANCE OF TRADE. 



CHAPTER XXI. 

BALANCE OF TRADE. 

The Balance of Trade a well known Principle in common Life — The Eiforts made to 
mystify the Subject.' — Adam Smilh and his School admit the Principle unawares. — The 
only Difficulty is an imperfect View of the Facts that belong to the Q,uestion. — The 
Difficulty in England not found in the United States, and is now removed there. — Prac- 
tical Men always Right on this Subject — Instance the London Times. — Adam Smith's 
" Wherewithal." — The Free-Trade Economists fail to distinguish between Money as a 
Subject and as the Instrument of Trade, in all their Reasonings on ih's Queirtion — Adam 
Smith lets the Cat out of the Bag, by an Hypothesis. — The Key of thi.s Hypoihesis. — Ad- 
am Smith makes Loss Evidence of Gain. — Joshua Gee's Po.sition and Reaponing as a 
British Economist — He the British Oracle. — His Policy for America. — The Coinage of 
a Nation Evidence of its profitable or unprofitable Trade. — M. Say's Reasoning on the 
Balance of Trade. — Its Absurdity. — Adam Smilh the original Author of thi.s Fallacy. — 
How One rides a Hobby. — A Citizen may be enriched by the same Act that subtracts 
from the Wealth of the Nation. — So of a Class of Citizens. 

That a principle so plain as that of a balance of trade, should 
be contested, and even denied, as a fact that can have no existence 
in social and public economy, is one of those extravagances, which 
could nowhere else find a place, except in the minds of men who 
subsist in a world of dreams, rather than in a world of reaHty. 
The principle, in its practical application, lies within the range of 
every one's daily experience and observation. There is not a sin- 
gle man, in any community, failing in business, or more technically, 
becoming a bankrupt, who is not an example of the operation of 
this principle. Why is he a bankrupt? Simply because he has 
not paid respect to the principle of the balance of trade. If he had 
regarded that, and not run in debt beyond his means, he never 
would have been a bankrupt. By this neglect, and by overtrading, 
he has rendered himself liable to demands in cash, beyond his abil- 
ity to meet, and he is obliged to stop payment. He is a bankrupt. 
The reason is simply, that a balance of trade, by his own improv- 
idence, or misfortune, has overtaken him, which he can not en- 
counter. 

Great efforts have been made, but without avail, by European 
Free-Trade economists and their disciples in this country, to mys- 
tify the argument founded on the balance of trade, and thereby to 
abate its force. Adam Smith admits all we want on this question, 
as indeed he does on almost every other on which ho attempts to 



BALANCE OF TRADE. 323 

establish a doctrine from which we feel obliged to dissent. It is so 
generally with his school : their isolated propositions are quite suf- 
ficient for our purpose on almost all the subjects in controversy. 
An estopel from their own words is doubtless the best kind of an- 
swer against those who have been so unfortunate as to answer 
themselves. On the balance of trade, Adam Smith says : " The 
ordinary state of debt and credit between any two places [or na- 
tions], is not always entirely regulated by the ordinary course of 
their dealings with one another ; but is often influenced by that of 
the dealings of either with many other places" [or nations]. Noth- 
ing can be more true than this ; and nothing more true than that 
it discloses the only difficulty in the debate, viz., an imperfect view 
of the facts that belong to the question. It is the whole commerce 
of a nation with all the world foreign to itself, that requires to be 
considered, when the balance of trade is sought for, in the same 
manner as in the case of an individual. It will not do for a mer- 
chant to consider only a part of his transactions, to know how he is 
to come out. He must consider them all. With all the facts in 
hand which are comprehended in this aggregate of a nation's for- 
eign commerce, or, which is the same thing, with correct tables of 
imports and exports, in connexion with a true estimate of their re- 
spective values, taking into consideration also a true account of the 
distribution of the profits of the carrying trade between home and 
foreign parlies, the rule claimed to arise from the baknce of trade, 
to determine whether a nation is, on the whole, and as a whole, 
doing a profitable or unprofitable business, with foreign parts, is 
precisely the same, and equally infallible, as that which arises from 
the well-kept books of a counting-house, to determine, by the bal- 
ances, whether the merchant or firm is making or losing money. 
Nor, so far as we can observe, is it pretended, that the rule is not a 
good and true one, on these conditions. The only objection, ap- 
parently, is, that the facts which constitute the rule, are not always 
reliable for the end in view, because they can not be accurately as- 
certained. 

There was a reason in England for saying the official records 
are not reliable for such a purpose, which does not exist in the 
United States, nor, so far as we know, anywhere else. In 1694, a 
law was passed, requiring all entries to be made in the custom- 
house according to the prices then fixed, which is still in force. 
This, ever since, has caused material variations between the official 
and real or declared values, increasing as time advanced, and every 



324 BALANCE OF TRADE. 

year fluctuating. But, from 1801 to 1845, inclusive. Porter, the 
latest authority, gives the " real or declared value," as they call it, 
in a separate column, though only for the exports. The " real or 
declared" value of the imports for these same years, we suppose, 
can be obtained by a like rule. It is no more true, however, that 
British economists may have been somewhat embarrassed by this 
mode of keeping the customhouse books, than that there is no oc- 
casion for such embarrassment in the case of the American records 
of the same class ; and since they also have in England the real or 
declared valuation, certainly of late years, it is not easy to see why 
they should object to this rule. 

That there may be some difficulty in ascertaining all the facts, 
with perfect accuracy, is not denied ; but the principle of the 
rule is undoubtedly a correct one ; and it is claimed, moreover, 
that the facts which belong to the case, in the United States, can 
be ascertained with sufficient accuracy to answer the purpose in 
view, inasmuch as perfect accuracy is not required. The bal- 
ances, imperfect as the means of ascertaining them are, yet with 
such helps as can be obtained, are generally so obvious, that all 
the objections that have been made to the rule, are utterly futile. 

Take, for example, the balances in the commercial history of 
the United States, as they relate to our foreign trade, which will be 
found in chapter xxiv. The main points of defect or inaccuracy 
in the tables cited, are such as throw the loss almost entirely on the 
side of the argument we are endeavoring to sustain, and of course 
impair it, first, because it is in evidence that an average of some 
ten millions a year, for a considerable time, has been left out of the 
table of imports, which ought to be there ; and the same defect 
may run back through the whole period ; while there is no evi- 
dence of a like defect in the table of exports, nor would it naturally 
or easily occur, as it would be without motive or necessity. But, 
in the second place, it is proved in various ways — proved in courts 
of justice — that a very large proportion of the imports, is always 
undervalued in the foreign invoices on which they are entered, for 
the purpose of lessening the amount of duties to be paid. If, 
therefore, for the sake of brevity, as well as obvious fairness to op- 
ponents, we take the tables as they are, and allow all that was 
earned in freight by American shipping, and all the avails of the 
fisheries, to balance the two important, and doubdess much larger, 
items above named as defects on the other side, there is, then, noth- 
ing else worthy of mention, affecting the accuracy of the rule. We 



BALANCE OF TRADE. 325 

are aware, indeed, that the British economists — some of them at 
'east — speak of the profits of the merchants as belonging to this 
reckoning. But all the profits of the American importer fall as 
much within the scope of the home trade as any other domestic 
transaction — for the transaction that makes his profit is domestic, 
betvveen him and the American people; and as to the profits of the 
foreign factor, who, hitherto, has made more than the American 
importer, he carries it all out of the country, which, for this reason, 
should not be mentioned by our opponents, who only lose by it in 
the argument, and help our side. 

But suppose that, for other reasons — though we do not see where 
they can be found — the relative augmentation, when perfect accu- 
racy is obtained, should be on the side of the exports, still the dif- 
ference between the two is so prodigious, that the general result 
could not be materially affected ; and the domestic history of the 
country, as to its periods of commercial prosperity and adversity, 
corresponds so well with the assumption, that these tables, on the 
whole, are a pretty fair exhibit, as to impart to them a strong pre- 
sumptive sanction. 

It is remarkable how practical men can never express themselves, 
when the effects of disturbing the balance of trade are apparent, 
without calling it involuntarily, and as a matter of course, by that 
name ; and not less remarkable how 2i soi-disant Free-Trade nation 
will itself do it by, the mouth of its organs. For example, the 
London Times of January 19, 1847, devotes a column to the sub- 
ject, all under this name, without thinking of its inconsistency with 
the Free-Trade theory. It finds " the balance" disturbed by send- 
ing, as a loan, one million sterling of bullion from the bank of Eng- 
land to the bank of France. The money-market feels it ; interest 
rises from 3 to 3J per cent. ; and there is " almost a panic." How 
much more, that journal says, when the other two or three millions, 
promised, shall go ? It predicts, that, in the course of the year 
1847, there will be '* a balance of trade" against England of sev- 
enteen millions sterling ; that there will be a crisis, and great com- 
mercial distress ; and recommends that every effort should be made 
to discourage and check imports, so as to reduce this anticipated 
*' balance." This is very inconsistent language for a Free-Trade 
country, and a Free-Trade journal. It only shows, that when the 
pressure of reality comes, they can not help calling things by their 
right names. Even the export of so small a sum as one million 
sterling, produces " almost a panic." This trifling loss of bullion. 



326 BALANCE OF TRADE. 

or specie, would not be felt in ordinary times ; but in consequence 
of tlie potato-rot and scarcity of bread-stuffs in Great Britain, she 
is not only paying iiigher for her necessary supplies, but is obliged 
to buy more than usual ; in other words, she buys more than she 
sells, imports more than she exports, which brings " the balance 
of trade" against her. Every million of money, therefore, that is 
exported at such a time, to settle balances in the United States or 
elsewhere, for breadstuffs, is felt, and threatens a crisis — occasions 
a panic. Why? — Because there is such a thing as a favorable 
or unfavorable balance of trade between one nation and all others 
— a state of things easily and universally recognised. In practice, 
in the current of events, uhether it be one way or the other, all see 
and feel it; while in theory, it is "denied. Why does not Great 
Britain stand by her own proclaimed theory, at such a time, and 
not be so sensitive because of this draught on her bullion, or specie ? 
There can be no danger from this course, according to the doc- 
trine of her Smiths, her Ricardos, and her M'Cullochs. But 
practice, experience, is found to be a very different thing from 
a Free-Trade theory. In doctrine they say. Free Trade always 
balances itself; in practice, they dare not trust it. 

Precisely according to these predictions the crisis came, and the 
commercial condition of England never received a greater shock 
than in 1S47, all from an unfavorable balance of trade, inducing 
large exports of specie, of which some 20 to 25 millions of dollars 
came to the United States to pay for bread-stuffs. And yet every 
one of our Free-Trade economists say, this was no disadvantage, 
because the money was exported as a commodity. 

But Adam Smith has given up the question, as follows : " It 
would, indeed, be more advantageous," he says, "for England, 
that it could purchase the wines of France with its own hardware 
and broadcloth, than with either the tobacco of Virginia, or with 
the gold and silver of Brazil and Peru." — " As a country which 
has wherewithal to buy tobacco, will never be long in want of it; 
so neither will one be long in want of gold and silver which has 
wherewithal to purchase these metals." The first of these ex- 
tracts needs no comment. The simplicity of the second, however, 
is really too remarkable to be passed over without notice. In the 
first place, it begs the question : a nation will not want money that 
has wherewithal to purchase it. Nor will a beggar in the streets. 
These Free-Trade economists say, and soy truly, that money is a 
commodity, and as much a subject of trade as any other commod- 



BALANCE OF TRADE. 327 

ity . but why should they fail to consider, that it has attributes, and 
discharges functions, by the common consent of mankind, which 
cai be ascribed to no other commodity ?* Wby should they fail i 
to consider the consequences resulting from the facts, that it is a | 
common currency throughout the world, in the negotiation of ex- [ 
changes of all other commodities, and that it is the only thing toy 
settle balances, wlien barter is dechned by a creditor? 

If the United States is in the habit of buying annually more 
than it sells, or can sell, and has no money to spare from its own 
bosom, how are these balances to be settled? — That is the ques- 
tion. Adam Smith and others of his school answer, that we shiall 
not long want the money, if we have wherewithal to buy it. This 
is only another form of putting the same question, and it is a prob- 
lem still. Certainly, it is not helping us out of the difficulty. '* If 
we have wherewithal to buy it;" alias, if there be a market for our 
" wherewithal. " This last is the only condition on which Adam 
Smith could fairly have come to his conclusion ; and the very case 
supposes, that this condition is out of the question. Money in 
abeyance is the correlative of the " wherewithal ;" and since the 
money is not in abeyance, or if it be not, it is impossible that we 
should have the " wherewithal." It is clear, if the money had 
been in abeyance to anything we had to give for it, it would have 
been realized. The case supposed, therefore, could not possibly 
occur. 

This apparent failure of the Free-Trade economists to recognise 
the peculiar and exclusive functions of money, in the market of 
the world, and their pertinacity in ranking it with all other ex- 
changeable commodities, would seem to have been the occasion of 
this very erroneous conclusion, that it is equally obtainable by 
other commodities, as others are by itself. There is no exchange- 
able commodity which money can not buy; but it may happen that 
all the commodities a man or a nation may have, can not buy 
money, unless it be at ruinous prices, and that to a limited extent, 
simply because there is no market, no demand for them, where 
money will be given. 

This fallacious doctrine, it seems, was in vogue when Joshua 
Gee published his work entitled *' Trade and Navigation of 
Great Britain," and he declares that he undertook it express- 
ly to expose this error. He says : " So mistaken are many 

• For the distinction between money as a subject and as the instrument of trade, 
see chapter xiv. 



328 BALANCE OF TRADE. 

people, that they say, money is a commodity like other things, and 
think themselves never the poorer for v^rhat the nation daily ex- 
ports," of the precious metals. He therefore says : *' I have 
thought the only method to furnish gentlemen with proper consid- 
erations, is to give some account of the commodities the nations 
we trade with take from us, and what we take from them, and to 
give my thoughts where I think the balance lies." And he did 
so, to the full conviction of all British statesmen, who, in their 
legislation, have adhered to Gee's doctrine, from that time to the 
present. Any one can see, that a true account of the foreign trade 
of Great Britain, or of any other nation, according to this plan of 
Joshua Gee, that is, "of the commodities the nations we trade 
with take from us, and what we take from them," will show whether 
that nation is gaining or losing by its foreign commerce. If it gets 
an annual balance of money, it is gaining ; if it parts with an annual 
balance of money, it is losing. 

Among the man-y true things which Adam Smith has said — 
and he has said enough for all our purposes — nothing is more 
true than the following : — 

" The balance of produce and consumption [home produce and 
consumption] may be constantly in favor of a nation, though what 
is called the balance of trade [its foreign trade] be against it. A 
nation may import to a greater value than it exports for half a cen- 
tury, perhaps, together ; the gold and silver which comes into it all 
this time, may be all immediately sent out of it ; its circulating coin 
may gradually decay, different sorts of paper-money being substi- 
tuted in its place ; and even the debts, too, which it contracts in 
the principal nations with which it deals, may be gradually increas- 
ing ; and yet its real wealth, the exchangeable value of the annual 
produce of its land and labor, may, during the same period, have 
been increasing in a much greater proportion. The state of our 
North American colonies, and of the trade which they carried on 
with Great Britain, before the commencement of the present dis- 
turbances [this was written in 1777], may serve as a proof, that 
this is by no means an impossible supposition." 

Apropos. This is the more valuable, not only as coming from 
such authority, but as being the best possible description of our 
own case, such as it was before the revolution, such as it was un- 
der the confederation, and such, to a great extent, as it has been, 
even under the operation of the federal constitution, down to this 
time, for want of adequate protection. Exactly so. Such were 



BALANCE OF TRADE. 329 

.he enterprise, industry, and other virtues of the American fathers, 
and such the resources and capabilities of the country, that they 
improved their lands, built houses and towns, and created a great 
amount of permanent wealth, which could not be conveniently car- 
ried away, and which remained behind, notwithstanding all their 
wrongs. Exactly so. " The circulating coin gradually decayed" 
for fifty years, or more, *' different sorts of paper-money being sub- 
stituted in its place." Exactly so. " Even the- debts contracted 
with the principal nations," Great Britain chiefly, " with which they 
dealt, gradually increased." Exactly so. "And yet the real 
wealth [the permanent wealth], the exchangeable value of the an- 
nual produce of land and labor may, during that period, have been 
increased in a much greater proportion." It doubtless increased, 
in either greater or less proportion, as compared with the increase 
of these foreign debts, chiefly contracted with the mother-country 
— probably, in a greater proportion. Certainly, it would have 
been a harder case than was alleged, and is generally supposed, if 
it did not. And was this the grace done to the colonists, that the 
mother-country did not carry away their houses, and other perma- 
nent fixtures, created by their industry and labor ; but only took 
away their money — everything that could be taken, and run them 
in debt — debts constantly increasing for half a century — to absorb 
all the money as fast as it should come in — and left the colonists, 
not exactly like the Mexicans in California, with hides, for a curren- 
cy, but with that which was worse, and good for nothing, " differ- 
ent sorts of paper-money," that had no specie basis. 

Yes, verily, nothing could be more true than this description, by 
Adam Smith, of the state of the colonies before the revolution. It 
was this very state of things that occasioned the revolution. And 
yet Adam Smith, an economist of the highest pretensions, and of 
a universal credit that has run down through three fourths of a 
century, has the audacity to adduce this condition of the colonists, 
not only as a reason why they ought to have been very contented, 
but as irrefragable proof, according to his theory, of their prosperity 
and increasing wealth ! It is no matter, according to him, how 
much the foreign balances are against the country; or how large 
the foreign debts, and how much they are increasing ; or though 
all the precious metals, as fast as they come in, be drawn away 
from the country by these debts ; or though the circulating medi- 
um, by such a cause, be composed of irredeemable paper, not really 
worth a penny ; — all this is no matter, according to Adam Smith, 



3S0 BALANCE OF TRADE. 

provided the nation or state is creating permanent fixtures, at home, 
of the nature of wealth, equal to or greater than the debts which it 
is creating abroad ! A real calculating Yankee would not only 
want his fixtures, his permanent capital, but he would want money 
to do business with, instead of contracting debts, to hang as a 
millstone about his neck, and prevent his prosperity. It would be 
no great comfort to him to live in a house, and work a farm, which 
he could not call his own, because both were mortgaged. And 
yet Adam Smith calls this prosperity, increase of wealth ! 

The key to this remarkable argument of Adam Smith, as well 
as to his entire work, will be found in chapter v., where it is shown, 
that he was doubtless in the service of the British government, in 
the production of his " Wealth of Nations ;" that his main object 
was to satisfy the discontented colonists, and to convince them that 
they were doing well, notwithstanding all their alleged grounds of 
complaint. It will be observed, tiiat he sets up an hypothesis, in 
the foregoing extract, and then brings in the case of the North 
American colonies to verify it. The simple truth is, that, in the 
hypothesis, he was describing the very case of the colonies, and 
had that only in view. He deserves the credit of reporting the 
case truly, exactly as it was. It is true, as he says, they had no 
money for fifty years ; that they were all the while running in debt ; 
that as fast as money came in, it was obliged to go out ; that they 
were compelled to resort to rag-money, without a specie basis ; and 
that they were building houses, and improving their lands, in the 
meantime. But the insult done to them, by this argument, is tel- 
ling them, that, under all these hardships and wrongs, which they 
thought, and fully believed, justified a rebellion against the British 
crown, they were doing very well, growing rich, and ought not to 
complain ! 

In view of the evidence presented in chapter xxiv., it hardly 
need be said that the commercial history of the United States, so 
far as it regards our foreign trade, for a large portion of the period 
since the establishment of Independence, is very like the case de- 
scribed above by Adam Smith, as being, in his opinion, and ac- 
cording to his theory, so pleasant, so prosperous, and so desirable 
a state of the colonies. Notwithstanding the immense balances 
against us, which we have had to pay, or have run in debt for — 
a part of them is now outstanding — we have worked hard and 
got together a good deal of wealth. It would be much more con- 
soling, if a part of these balances against us had really added to 



BALANCE OF TRADE. 331 

the permanent wealth of the country, by having been created for 
imports of a durable kind, entering into permanent fixtures and 
productive of wealth. But it will be found, on examining the 
official tables which give instruction on this point, that, wherever 
our imports have risen above the exports, more or less, the increase 
was chiefly on perishable articles, such as silks, cloths, wines, &c., 
being chiefly of the same character with the wasteful expenditures 
of the spendthrift, which leave no good behind, but incur incon- 
venient obligations for the future. The silks brought into the 
country in that remarkable period of excess of imports over ex- 
ports, from 1833 to 1834, inclusive, amounted to $105,000,000; 
woollen cloths, for the same time, to $102,000,000; cotton cloths, 
for same time, to $83,000,000 ; linens, for same time, to 
$41,000,000 ; wines, for same time, to $22,000,000 ; and so on; 
each of these being, two and three to one of their usual propor- 
tion of imports. It is also made evident, by the same scrutiny, 
that, under an adequate system of protection, we could have saved 
this balance against us, and turned it the other way, by domestic 
productions at cheaper rates, and better in kind, which would not 
only have retained in the country all the capital comprehended in 
these unfavorable balances, to have made us so much richer ; but 
the use of this capital at home would have multiplied itself many 
times ; all which, that is, the original capital and its contingent 
proceeds, are for ever lost — not to speak of ^he immense and 
ong-protracted system of foreign taxation, as noticed in chapter 
xxiv., to which we have been subjected thereby. Nor is this 
all : the injury done by a several times breaking down of the cur- 
rency, occasioned by this sole cause, is incalculable. 

Doubtless, there was more wealth created at home, during each 
of those years of excessive imports, and during all others in our 
history, than was thus wasted abroad — and much worse than 
wasted, because it embarrassed the country. But, according to the 
rule of Adam Smith, and of those of his faith, the wealth which 
the people created at home, in spite of a bad public policy, and in 
soite of the general losses and misfortunes occasioned by these 
immense draughts on the country, from foreign parts, the two things 
put together, gain on one side and loss on the other, are evidence 
of prosperity and increasing national wealth. The remarkable 
part of the rule is, that the loss should be evidence of gain ! So 
Adam Smith represents it. 

One is at loss to know what Adam Smith's notions of balance 



332 BALANCE OF TRADE. 

of trade were. For example, he says : " Among all the absurd 
speculations that have been propagated concerning the balance of 
trade, it has never been pretended that either the country loses by 
its commerce with the town, or the town by that of the country 
which maintains it." If he knew, as he certainly ought to have 
known, that this is not a parallel case, it might seem very unex- 
pected trifling for him to make such a comparison ; and if he did 
not know, one can hardly see how he was qualified to speak on the 
subject. 

The position occupied by Joshua Gee as a British economist, 
and the potent influence which he wielded in reviving the British 
protective system, and placing it on a foundation which has made 
that empire the most powerful in the world, are worthy of particu- 
lar notice. His work was published by himself in 1730, and the 
sixth edition, 1755, the one before us, was the second or third that 
appeared after his death. Gee had co-workers, before and after, 
such as Child, Mun, Smith, Temple, Cantillon, and Mildmay; 
but, not having their works in hand, we can not speak of their 
merits. Much care was taken by Edward III., to protect trade, 
and in the 28th year of his reign, the exports were as 7 to 1 of 
imports. Under Elizabeth, the protective policy was systematized, 
and vigorously applied, to the great advantage of her kingdom, 
and strength of her administration. This policy was continued for 
full half a century after her demise. It appears from Gee, that, 
from the 41st year of her reign, 1599, the coinage — which Gee 
makes a rule of national prosperity — continued to increase, down 
to 1657 ; and that from 1667 to 1675, it fell off to an alarming 
degree. It would seem, that, for some time after this, the natk)n 
was in a bad way, as to its foreign trade. Gee says : '* In 1716, 
the lords of trade sent for sundry persons to consult with them. 
Among the rest I was also required to give ray thoughts ; and af- 
ter I had given them the best information I was then capable of, 
they ordered me to commit what I had said to writing, and to lay it 
before them. After delivering the said memorial, I was frequently 
required to give my thoughts, the answers to which are contained 
in these chapters." — "The printing of the following discourse 
was not with a design to publish it, much less to presume to pre- 
sent it to the king ; but to put a iew of them into the hands of the 
ministers of state, and, other great men, to show the wounds our 
trade and manufactures had received, and those remedies which 
may soon and easily be obtained ; that they might represent them* 



BALANCE OF TRADE. 333 

to our legislators, who have it in their power to make us a rich and 
flourishing people. After I had delivered a few of theni, I un- 
derstood by some great persons, that a discourse upon trade would 
be acceptable to the king, and also to the queen and prince. It was 
much to my satisfaction, that I had touched upon a subject so 
agreeable to their sentiments. I thought it, therefore, my duty to 
present this treatise to their royal hands. It soon got abroad, that 
I had writ a discourse upon ' the trade and navigation of 
Great Britain,' and I was informed if I did not permit it to be 
pubhshed, it would fall into such hands as might print it, and alter 
my sense and intention." 

A principal object of Gee seems to have been to show how the 
American colonies and plantations might be made to contribute to 
the wealth of the mother-country. With regard to the general 
policy he proposed, he says : " I am thoroughly persuaded the 
methods herein proposed will give us a fair prospect of outdoing 
any nation of Europe." At that time, England was outdone by 
France, and other continental powers, which had taken great pains 
to encourage manufactures. Gee proposed a way to come up to 
and get before them, which abundantb" succeeded. 

His work aims to establish the two following propositions: 1. 
" That the surest way," &c. (see page 102). These propositions 
are a part of the titlepage of the work. 

Gee saw that, in his time, England was annually paying a bal- 
ance of trade against herself. The task he undertook, in proof of 
the above propositions, as announced by himself, was to give 
"some account of the commodities each country we trade with 
takes from us, and what we take from them, with observations on 
the balance." The balance was found to be against England. 
On this subject he says : " To take the right way of judging of 
the increase or decrease of the riches of the nation, by the trade 
we drive with foreigners, is to examine whether we receive money 
from them, or send them ours. For, if we export more goods 
than we receive, it is most certain we shall have a balance brought 
to us in gold and silver, and the mint will be at work to coin that 
gold and silver. But, if we import more than we export, or spend 
our money in foreign countries, then it is certain the balance must 
be paid by gold and silver sent them to discharge the debt." 

The following citations from Gee will afford some notion of his 
policy for the American colonies and plantations, which seems to 
have been adopted: — 



334 BALANCE OF TRADE. 

" Our sugar plantations take from England all sorts of clothing, 
household furniture, and a great part of their food. So that they 
are entirely dependent upon us." Of the tobacco plantations, 
Maryland and Virginia, he says: "They take from England their 
clothing, household goods, iron manufactures of all sorts, saddles, 
bridles, brass and copper wares ; and notwithstanding their dwel- 
ling among the woods, they take their very turner's wares, and 
almost everything else that may be called the manufacture of Eng- 
land. England takes from them, not only what tobacco we consume 
at home, but very great quantities for re-exportation, which may 
properly be said to be the surest way of enriching this kingdom." 
He glorifies the trade of Pennsylvania with the Spanish West In- 
dies, because it draws gold and silver from the Spanish coast, 
"which," he says, "is brought home by our trading ships from 
thence, and has very much enlarged their demands upon us for 
broadcloths, kersies, druggets, surges, stuffs, and manufactures of all 
sorts." Of New Jersey and New York, he says : " Their traffic is 
much the same. We have what money they can raise, to buy our 
manufactures for their clothing ; and what they further want, they 
are forced to manufacture fi^r themselves." Of New England he 
says : " She takes from us all sorts of woollen manufactures, linen, 
sail-cloths and cordage for rigging their ships, &c. To raise 
money to pay for what they take of us, they are forced to visit the 
Spanish coast, where they carry any commodity they can trade 
with. What other necessaries they want, they are forced to man- 
ufacture for themselves, as the aforementioned colonies." 

No one can deny, that these facts are in excellent harmony with 
the description of the colonies by Adam Smith ; although it is not 
so easy to see how the story of either is proof of colonial prosperity. 
Both prove that England got all the money, and that being gone, 
that the colonists, hke all poverty-stricken people, did as well as 
they could without money. 

The following from Gee is to the same point: "It is absolutely 
necessary that ships which trade between the plantations and any 
part of Europe, shall be tied down by the strongest penalties, not 
to return again to the plantations without taking their clearings 
from some port in Great Britain. For, if they are obliged to come 
hither before they return, they will bria^ the produce of their car- 
goes with them, and of consequence lay it out with us," &c. 
"Queen Elizabeth was the first crowned head," says Gee, "that 
gave effectual circulation and spirit to our commerce. She knew 



BALANCE OF TRADE. 335 

the right way to enrich a nation, was to send out as many of our 
products and merchandise as possible, and looked with a careful 
eye upon those commodities which were imported for ■ 'ury. 
The queen, observing that great quantities of money were sen^ ort 
of England to buy silks and other outlandish wares, and that many 
of the nobility wasted their estates and run much in debt, she, by 
proclamation, commanded all persons to conform to a certain pre- 
scribed mode of apparel, and she began the example herself in her 
own court. Queen Caroline also hath given a most noble example 
for encouraging the wear of our own manufactures, and discour- 
aging those drains to the nation by foreign lace, silks, &c. ; and it 
is to be hoped her example will be imitated by our nobility and 
gentry. Then we shall soon see the balance of trade turn in our 
favor, and gold and silver brought into the nation to be coined." 
" What a boundless wealth," says Gee, " might be brought into 
this kingdom by supplying our plantations with everything they 
want, and all manufactured within ourselves !" He thought " a 
small squadron of light frigates," and " placing standing forces in 
the colonies, to keep them in order, and obliging them to raise 
money to pay them," would suppress any disposition in the 
colonists *' to set up for themselves." He says : " It would 
be sad policy for governments to spare their people, be at the 
charge of protecting them abroad, and yet allow them to set up the 
manufactures of their mother-kingdoms, whereby they would sup- 
ply themselves, and in respect to trade and commerce, throw them 
into a state of independency." He proposed that " all slitting 
mills," in the colonies, " and engines for drawing wire and weav- 
ing stockings, be put down ; and that every smith who keeps a 
common forge or shop, shall register his name and place of abode, 
and the name of every servant which he shall employ ; which 
license shall be renewed every year, and pay for the liberty of 
working at such trade ; that all negroes shall be prohibited from 
weaving either linen or woollen, or spinning or combing wool, or 
working at any manufacture of iron, further than making it into 
pig or bar iron ; that they shall be also prohibited from manufac- 
turing hats, stockings, or leather of any kind." Private families 
might spin and weave for their own use, but not for market. De- 
tailed reports from the governors of colonies to the lords of trade, 
of all going on in the way of manufactures, were required, " that 
they might be encouraged or depressed, according to their wants, 
or the dano-er of their too much interferin": with us. Indeed,'' 



336 BALANCE OF TRADE. 

says Gee, " if they shall set up manufactures, and the government shall 
afterward be under a necessity of stopping their progress, we must 
not expect that it will be done with the same ease that now it may." 

On the subject of depending on foreigners for things that could 
be produced at home. Gee says : " It is astonishing that so wise a 
nation as this does not take care to regulate these matters. All 
other nations of Europe," he says, " are wise enough to do it." — 
" For the sake of saving a penny, we often debar ourselves of 
things of a thousand limes the value. This misfortune will hap- 
pen to any trading nation, if the persons who have the regulation 
of the commerce do not understand it well enough to distinguish 
nicely between those channels by which the riches flow in upon 
them, and those that carry them away. 

" If we examine into all the circumstances of the inhabitants of 
our plantations, and our own, it will appear that not one fourth part 
of their product redounds to their own profit. For, out of all that 
comes here, they only carry back clothing and other accommoda- 
tions for their families, all which is of the manufacture and mer- 
chandise of this kingdom. If anything to spare, it is laid up here, 
and their children are sent home to be educated ; if enough to 
purchase an estate, then it is laid out in Old England. All these 
advantages we receive from the plantations, besides the mortgages 
on the planters' estates, and the high interest they pay us, which is 
very considerable ; and therefore very great care ought to be 
taken in regulating all affairs of the colonies, that the planters be not 
put under too many difficulties, but encouraged to go on cheerfully. 

" New England and the northern colonies have not commodities 
and products enough to send us in return for their necessary clothing, 
&c., but are under very great difficulties ; and therefore n?iy ordi- 
nary sort sells with them. And when they are grown out of fashion 

with us, THEY ARE NEAV-FASHIONED ENOUGH THERE. There- 
fore, those places are the great markets we have to dispose of such 
goods. . . The continual motion and intercourse our people have 
with the colonies, may be compared to bees of a hive, which go out 
empty, but come back again loaded." — "Laws," said Gee, " are 
made, in the colonies, which they exercise till sent home and dis- 
approved of. It is therefore proposed, that no law shall pass in iu 
plantations, until a copy thereof be prepared by the governor ar.d 
assembly of each province, and sent here to be examined or ap- 
proved by the king and council, as the laws from Ireland now are," 
save special laws for defence against the Indians. — "We ought 



BALANCE OF TRADE. 337 

always to keep a watchful eye over our colonies, to restrain them 
from setting up any of the manufactures which are carried on in 
Great Britain, whereby they would do us much hurt, and them- 
selves no good, because their labor might be more profitably em- 
ployed in raising the products of the country ; and any such 
attempts should be crushed in the beginning; for if they are suf- 
fered to grow up to maturity, it will become difficult to suppress 
them, and seem a greater hardship to the people." This, certain- 
ly, is in excellent keeping with the annual report of the United 
States secretary of the treasury, for December, 1845. 

" To think it would be an advantage for any trading nation to 
admit all manner of foreign commodities to be imported free from 
all dudes, is an unaccountable notion, and still much less suitable 
to the circumstances of our island than to the continent. . . It jtvill 
be a maxim strictly to be observed by all prudent governments, 
which are capable of manufactures within themselves, to lay such 
duties on the foreign as may favor their own, and discourage the 
importation of any of the like sorts from abroad. By this means 
the French have, in our time, nursed up a woollen manufactory, 
and brought it to such perfection, as to furnish themselves with all 
such woollen goocls as they formerly bought of us to a very great 
value, and are even become competitors with us in foreign mar- 
kets." — "We send our money to foreign nations, and by employ- 
ing their poor, instead of our own, enable them to thrust us out of 
our foreign trade, and by their imposing high duties upon our man- 
ufactures, so clog the exportation of them, that it amounts to a pro- 
hibition." — " The trade of a nation is of mighty consequence, and 
a thing that ought to be seriously weighed, because the happiness 
of so many millions depends upon it. A little mistake in the be- 
ginning of an undertaking may swell to a very great one. A nation 
may gain vast riches by trade and commerce ; or for want of due 
regard and attention, may be drained of them. I am the more wil- 
ling to mention this, because I am afraid the present circumstance 
of ours carries out more riches than it brings home. As there is 
cause to apprehend this, surely it ought to be looked into ; and 
the more, since, if there be a wound, these are remedies proposed, 
which, if rightly applied, will make our commerce flourish, and the 
nation happy." 

Such was the reasoning of Joshua Gee, which was adopted as 
the national policy of Great Britain at the time, and which has pre- 
vailed there down to the present period, without remission, and 
22 



338 BALANCE OF TRADE. 

without any present prospect of being relaxed. It was by this pol- 
icy, that she has become the richest, the greatest, and most power- 
ful nation in the world. 

M. Say*s reasoning on the balance of trade is curious enough. 
He says : " Money, like other things, is itself a commodity. A 
French merchant consigns to England brandies, to the amount of 
20,000 francs ; his commodity was equivalent in France to that 
sum in specie ; if it sell in England for .£1000 sterhng, and that 
sum remitted in gold or silver be worth 24,000 francs, there is a gain 
of 4,000 francs only, although France has received 24,000 francs 
in specie. But, should .the merchant lay out his .£1,000 in cotton 
goods, and be able to sell them in France for 2S,000 francs, there 
would then be a gain to the importer and to the nation of 8,000 francs, 
although no specie whatever had been brought into the country. In 
short, the gain is precisely the excess of the value received above the 
value given for it, whatever be the form in which the import is made." 

Brandy is a product of France, and she is supposed to have a 
surplus for the foreign market. Clearly, then, by the first hypoth- 
esis, France received an addition to her " numeraire" of 24,000 
francs, and was a gainer to that amount. If her " tools" of trade 
were short, it was an important gain, so far as it might go to sup- 
ply that defect. She gained the whole any how. In the second 
hypothesis, as between France and England, it was a mere case 
of barter of one thing for another; and if France wanted the cotton 
goods, and did not want the brandy, it was a profitable exchange 
— that is all. It can not be said that France gained 8,000 francs, 
as M. Say avers ; for the profit of the merchant was between him 
and the consumers of his goods. He bought the brandy of French 
producers, and sold the returns to French consumers, who paid him 
8,000 francs for his services. So far as these transactions were 
concerned, these 8,000 francs profit to the merchant, only passed 
from one hand to another in France. France itself, as a trading 
party with England, gained nothing but^ as is possible, a pro^table 
barter — things wanted for things not wanted. When Peter pays 
over to Paul, both being Frenchmen, 8,000 francs, by what rule 
can it be shown that France is, therefore, 8,000 francs richer ? 
The principle involved, and evidently intended to be asserted by 
M. Say, in these two hypotheses, is entirely fallacious, and in its 
practical operation as a doctrine of public economy, might be ruin- 
ously disastrous. As for instance, when a nation, by overtrading, 
has already parted with half, or three fourths of its " tools" of trade, 



BALANCE OF TRADE. 339 

or of the cash which is necessary for its ordinary business, this doc- 
trine avers, that that nation is not only a gainer by the barter of one 
thing for another, if the merchants who make these exchanges profit 
in the distribution of the returns, and a gainer to the exact amount 
of the profit of the merchants ; but that it is a gainer also by. trading 
away the remainder of its cash, provided the merchants realize a 
profit, and a gainer to the amount of that profit. For he says : 
" The gain [to the nation] is precisely the excess of the value re- 
ceived, above the value given for it, whatever be the form in which 
the import is made." 

This brings us precisely to the cases of excessive importations, 
as noticed in our commercial history in chapter xxiv., which have 
always proved so disastrous and ruinous to this country. That 
this is M. Say's meaning, is evident enough from what he says, in 
the same connexion, viz. : " In a thriving country, the value of the 
total imports, should always exceed that of the exports." It is easy 
enough to see, that no country would thrive very long in this way, 
as its cash must sooner or later be exhausted. But, on his own 
theory, that money is only a commodity, there could not be an ex- 
cess of imports, in an honest commerce, when all balances are 
settled. Does he mean to sanction repudiation — fraud? The 
whole of this reasoning is characterized by a theoretical audacity 
which one might well wonder at, and demands a faith that must be 
entirely blind, if given. 

It is not denied that the earnings of American ships and crews, 
and the profits of American merchants, might justify some excess 
of imports, if there were money enough already in the country for 
its trade. But we do not understand this to be the ground of M. 
Say's averment. He expressly says, that a nation should encourage 
the export of specie, as a profitable commerce, without any regard 
to its being necessary, or not, as " tools" of trade at home. 

What is necessary to a private commercial dealer, is necessary 
to a commercial nation, viz., always to have money enough at com- 
mand, to carry on the business of the party concerned, and to meet 
all engagements, without embarrassment. To dispose of other com- 
modities, not wanted at home, as fast as ready for market, at a fair 
price, may well be regarded as good economy. And to use money 
in trade, so long as enough is on hand for all demands, may also 
be good economy. But to part with money merely for the sake 
of buying more than one sells, without regard to the consideration 
whether it can be spared, is a most extraordinary method of thrift. 



840 BALANCE OF TRADE. 

All prudent men think it best to sell at least as much as they buy ; 
and if they have money enough for all demands, they may thrive 
by it. But when their purchases habitually exceed their sales, 
there is no recognised mode of settling balances except by cash. 
If cash had been hoarded, it might be safe and advisable to go on 
in this way, till the excess of usual and known demands should be 
exhausted. The values received, and put to use, might be profitable, 
when the hoarded money would riot be so. But farther than that, 
could not be regarded as within the bounds of commercial prudence. 

As a man, by cultivating his estate, and taking care not to buy 
more than he sells, may thrive, so the home trade of a nation, when 
there is no excess of imports over exports, is the way to a nation's 
wealth ; and as a man who habitually runs in debt, must ultimately 
fail, so must a nation fail, that habitually imports more than it ex- 
ports. The wealth of individuals and of nations is usually created 
at home. It never comes from abroad, except by a practice di- 
rectly the reverse of M. Say's hypotheses. In that way, it may 
come ; and in that way Great Britain has acquired immense wealth. 

But Adam Smith was the author of the mode of reasoning above 
ascribed to M. Say ; and it was originally presented by him in the 
following form : *'If the tobacco which, in England, is worth only 
a hundred thousand pounds, when sent to France, will purchase 
wine which is, in England, worth a hundred and ten thousand 
pounds, the exchange will augment the capital of England by ten 
thousand pounds. If a hundred thousand pounds of English gold, 
in the same manner, will purchase French wine, which, in Eng- 
land, is worth a hundred and ten thousand, this exchange will 
equally augment the capital of England by ten thousand pounds. 
As a merchant who has a hundred and ten thousand pounds worth 
of wine in his cellar, is a richer man than he who has only a hundred 
thousand pounds worth of tobacco in his warehouse, so is he like- 
wise a richer man than he who has only a hundred thousand pounds 
worth of gold in his coffers. He can put into motion a greater 
quantity of industry, and give revenue, maintenance, and employ- 
ment, to a greater number of people than either of the other two. 
But the capital of the country, is equal to the capitals of all its 
different inhabitants, and the quantity of industry which can be 
annually maintained in it, is equal to what all these different capi- 
tals can maintain. Both the capital of the country, therefore, and 
the quantity of industry which can be maintained in it, must gen- 
erally be augmented by this exchange." 

Adam Smith, as will be seen, has raised two questions here, one 



BALANCE OF TRADE. 341 

of private and the other of public economy, and has confounded 
the two, to help himself to an absurd conclusion. In the matter 
of private economy, he is right, and right in his conclusions, so far 
as they fall within that range ; but in that of public economy, he 
is wrong, because he is absurd. As we admit the correctness of 
his conclusions, so far as they relate to private economy, it is un- 
necessary to consider them. So far as public economy is con- 
cerned, the tobacco and the wine are equivalents. The nation is 
neither richer nor poorer, for the exchange, though the merchant 
has gained ten thousand pounds. Adam Smith's statement, that 
there is ten thousand pounds more ability to put industry in motion, 
is true as applied to the merchant, and false as applied to the na- 
tion, so far as his premises go. The gain of the merchant has only 
changed hands in England, so far as we are informed. It might 
have done more for industry in other hands, or it may do more in 
his ; but on that point nothing need be said, as nothing can be 
proved. Adam Smith's reasoning, therefore, falls to the ground, 
as beginning with the exchange of the tobacco for the wine. But 
in the exchange of the gold for the wine, he has made a sad blun- 
der. As he calls this "a trade of consumption," in this very con- 
nexion, we conclude his hypothesis leaves this wine, bought in 
France with gold, to be consumed in England. If so, though the 
merchant is richer by ten thousand pounds, nothing is more clear, 
than that the nation is minus a hundred thousand. If the wine 
had been re-exported, the nation might have been a gainer. But 
this does not appear to be a part of the hypothesis. The wine is 
drunk at home, and the gold is in France. Here is seen the dif- 
ference between private and public economy, when private and 
public interests are both involved in the same foreign commercial 
transactions. Not that there is any difference in principle between 
private and public economy, nor that there can be two kinds of 
economy, of which more elsewhere ; but a man may be enriched 
by the same act that subtracts from the wealth of a nation. 

The ground of this fallacy of M. Say, Adam Smith, and others 
of that school, lies in the assumption, that there is no economical 
difference between money and the commodities for which it is ex- 
changed — a question that has already been considered in chapter 
xiv. It is remarkable, how devotion to a theory will blind the eyes 
to absurdity. This, as will be found, is one of the most vital errors 
that could possibly be committed in a system of public economy. 
It is, perhaps, true to say, that it is the fundamental error of the 
advocates of Free Trade, and the source of all the rest. 



342 THE MUTUAL DEPENDENCE OF 



CHAPTER XXII. 

THE MUTUAL DEPENDENCE OF AGRICULTURE, MANUFACTURES, 
AND COMMERCE. 

These three are a natural Family of Interests in the United States. — Agriculture alone 
subjects a Nation to Depenilence — Adam Smith on this Point — Adam Smith and his 
School have furnished the best Refutation of their own Errors. — An Argument on the 
indissoluble Connexion between these three great Interests. — The " Mercantile and' 
Agricultural Systems," as defined by Adam Smith and others, considered. — There is no 
Foundation for this Array of these two Systems, as opposed to each other, and made so 
much of by some of the Economists — The Importing Merchants favor Free Trade. — 
Smitli's and Gee's Description of this Class of Traders. — The Independent Position of 
every Commercial Transactioii. 

It is remarkable, that these three comprehensive words, agri- 
culture, manufactures, and commerce, have, from the beginning 
of our history, been employed to represent the three cardinal in- 
terests of the country. They are equally natural, proper, and true 
— natural as suggested by experience and observation ; proper as 
expressing the things intended ; and true as expressing them in 
their natural order and relative importance. Each of them, in a 
great country — more especially in one that aspires to indepen- 
dence — is indispensable to each. They are a natural family of 
interests, that can not be divorced, without fatal injury to the com- 
mon good ; and since each is indispensable to the wealth, great- 
ness, power, and independence of a nation, it is not easy to say 
which could be wanting with the least impediment to these objects. 
Agriculture is doubtless most necessary to the subsistence of a 
people, in the more piimilive condition of the race; but there can 
be but little of private or public wealth, but little of civilization, 
nothing of independence as a political commonwealth, and there 
must be almost or quite a total want of political power among na- 
tions, with that member of the great family whose sole pursuit is 
agriculture merely. To furnish food for others to live on, and raw 
materials for others to work over and grow rich by, in the applica- 
tion of their ingenuity, skill, and art, is a condition of dependence 
and subserviency, both of individual persons and of nations. Adam 
Smith has stated this point with great force, as follows : " A small 
quantity of manufactured produce purchases a great quantity of 
rude produce. A trading and manufacturing country, therefore, 



AGRICULTURE, MANUFACTURES, AND COMMERCE. 343 

with a small part of its manufactured produce, will purchase a 
great part of the rude produce of other countries ; while, on the 
contrary, a country, without trade and manufactures, is generally 
obliged to purchase, at the expense of a great part of its rude 
produce, a very small part of the manufactured produce of other 
countries. The one exports what can subsist and accommodate 
but a very few, and imports the subsistence and accommodation of 
a great number. The other exports the accommodation and sub- 
sistence of a great number, and imports tiiat of a- very few only. 
The inhabitants of the one must always enjoy a much greater 
quantity of subsistence than what their own lands, in the actual 
state of their cultivation, could afford ; and the inhabitants of the 
other must always enjoy a much smaller quantity." 

This, as can not be denied, is very remarkable language, for one 
who is set up as authority in the United States, to make us con- 
tented with being mere raw producers for Europe, and Great 
Britain in particular. The case, certainly, is here very fairly stated 
by Adam Smith : " The one [the raw-producing country] exports 
what can subsist and accommodate but a very few [of its own pop- 
ulation], and imports the subsistence and accommodation of a 
greater number [in the manufacturing country]. The other [the 
manufacturing country] exports the subsistence and accommoda- 
tion of a greater number [of its own population], and imports that 
of a very few only [of the population of the raw-producing coun- 
try]. The inhabitants of the one [the manufacturing country] must 
always enjoy a much greater quantity of subsistence," &c. Again, 
the same principle is developed by Adam Smith in the following 
sentence : *' In every country of Europe we find, at least, a hun- 
dred people who have acquired great fortunes from small begin- 
nings, by trade and manufactures — the industry which properly 
belongs to towns — for one who has done so by that which prop- 
erly belongs to the country, viz., the raising of rude produce, by 
the improvement and cultivation of land." 

The condition of the rou'-producing country, as above described 
by Adam Smith, is precisely that into which it was proposed by 
the secretary of the treasury, in his annual report of December, 
1845, to put the United States ; that is, to raise rude produce for 
manufacturing nations, such as England. He says : "Agriculture 
is our chief employment. It is best adapted to our situation." 
England, and other foreign workshops, would, in such a case, 
make all the fortunes, by the sweat of American brows. Admit 



344 THE MUTUAL DEPENDENCE OP 

that these fortunes would otherwise be made by American manu- 
facturing towns, under a protective system, the capital would then 
remain at home, and be employed here. It would flow back from 
the towns to the country, and enrich the whole community. Is 
any one so simple as to imagine, that it is equally well, and even 
better, for the country, that its money should go abroad to enrich 
foreigners, than to stay at home, and enrich Americans, who would 
employ it all at home ? — But Adam Smith discloses yet another 
pertinent and forcible principle, applicable here, in the following 
words : " The commerce and manufactures of cities, instead of 
being the effect, have been tlie cause and occasion of the cultiva- 
tion of the country." Thus he recognises, very justly, the indis- 
soluble connexion between agriculture, manufactures, and com- 
merce, and at the same time proves that the manufacturing and 
commerce must be done by the nation that produces the raw ma- 
terial, else its wealth will be drawn away, and the manufacturing 
nation or nations will grow rich at its expense. It is well to be 
able to establish so clear a proposition, by the authority which is 
cited to overthrow it. Fortunately it happens, as we often have 
occasion to remark, that every one of the European economists, 
from whom the doctrine of Free Trade has been borrowed by their 
American disciples, who seem to be incapable of discrimination, 
has unavoidably laid down, here and there, isolated propositions, 
which not only establish a protective policy on the strongest pos- 
sible foundation, but which utterly subvert all the reasoning, found 
in the same authorities, favoring Free Trade. They have them- 
selves furnished the best refutation of their own errors. 

Dr. List, a German economist, and an advocate of Protection, 
says : *' The production of raw material and food, is of high im- 
portance among the nations of the temperate zone, only with regard 
to their internal commerce. By the export of grain, wine, flax, 
hemp, wool, and such like, a rude or poor nation, in the infancy 
of its civilization, may signally raise its agriculture ; but a great 
nation has never thereby arrived at wealth, civilization, and power. 
One may lay it down as a rule, that a nation is so much the more 
wealthy and powerful, the more it exports manufactured products, 
the more it imports raw materials, and the more it consumes the 
products of the torrid zone." 

We proceed to state, that, in proportion as home manufactures 
are multiplied and extended by a protective system, so, not in the 
same proportion, but in a far greater proportion, are the agriculture 



AGRICULTURE, MANUFACTURES, AND COMMERCE. 345 

and commerce of the country benefited. It is shown, elsewhere, 
how domestic manufactures absorb the products of agriculture, and 
how a home market for agricultural produce is better than a foreign 
market. In the first place, the domestic art absorbs of the prod- 
ucts of agriculture, all that is necessary for the subsistence of the 
artisans, which would otherwise be supphed by the artisans them- 
selves. In the next place, agriculture furnishes the raw materials in 
many cases, as in the manufacture of woollens, and in the making 
and manufactures of iron. This is all saved to the American agri- 
culturist, by home manufacture, and the benefit is immense. In 
the third place, all the varieties of business that are set agoing 
at home, by this increase of home manufactures, take off from the 
number of persons devoted to agriculture, that is, their numbers 
relative to other pursuits, make agriculture more profitable for 
the remainder, increase the demand for agricultural products in 
a variety of ways, and in that mode sustain and raise prices. In 
the fourth place, it makes a great difference in the profits of the 
agriculturist, when the manufacturer comes to him at his own door, 
and when he has to go after the manufacturer in foreign parts. In 
the former case, the agriculturist is sure of his customer ; in the 
latter, not; and in the former, he is saved the costs of transporta- 
tion both ways, which the latter would impose upon him. This 
close contiguity of the agriculturist and manufacturer, helps both, 
sustains both, and both contribute to the weahh of the- community, 
which, in turn, contributes to their wealth. The many values, 
added by manufacture to the raw materials, sometimes six, some- 
times ten, running up to hundreds, and even thousands, which 
would otherwise be created and realized abroad, are created and 
realized at home, and add so much to the stock of private and 
public wealth. 

Professor Tvviss well observes : " It is of the highest impor- 
tance to the farmer, that the arts should prosper, as it is recipro- 
cally to the artisan, that agriculture should flourish. A town situ- 
ated in a rich country finds a large body of purchasers among the 
neighboring agriculturists, precisely as farmers, who dwell near a 
flourishing town, find an excellent market for their produce among 
the artisans. . . If the agriculture of a country flourishes, it is a 
reason why its manufactures and commerce should flourish, just 
as the prosperity of its manufactures and commerce must exercise 
a beneficial influence upon its agriculture." This, it must be al- 
lowed, is most excellent reasoning, except, perhaps, it does not 



346 THE MERCANTILE AND AGRICULTURAL SYSTEMS. 

State with sufficient clearness and force the reciprocal dependence 
of agriculture , and the arts. Instead of saying, *' If the agriculture 
of a country flourishes," &c., he should have said, it flourishes 6e- 
cause the arts do, and the prosperity of the arts is identified with 
that of agriculture. Each is cause of the good condition of the 
other. Commerce, including home and foreign trade, is the great 
puhlic agent, which agriculture and manufactures employ to dis- 
tribute their products at home and abroad ; and it has elsewhere 
been shown in this work, demonstrated, we may say, by authen- 
tic statistical evidence, that commerce — home and foreign trade 
— always flourishes most under a protective system. Consequently 
it is proved, by this result in the matter of commerce, as well as 
by other modes of reasoning, that agriculture and manufactures 
prosper most under such a system. Else, how could commerce 
have more to do, as the agent of these two great interests ? 

There has not, therefore, been a mistake, as the doctrines of 
Free Trade suppose, in the importance which, from the beginning 
of our history as a nation, has been attached to these three cardi- 
nal interests pf the country, agriculture, manufactures, and com- 
merce; much less has there been a mistake in the importance felt 
of protecting them equally and alike, and protecting them well, as 
the helps and handmaids of each other, and they together, as the 
instrument of the wealth and power of the whole people. 

The respect which has been so long rendered to Adam Smith, in 
other words, his authority, seems never to have admitted of a ques- 
tion, that there must be something in that which he has made so 
much of, viz., the assumed antagonistical positions of commerce and 
agriculture ; and accordingly almost every \yriter on public econo- 
my, since Adam Smith, has taken up the debate about " the mercan- 
tile and agricultural systems." In the " mercantile" is included the 
manufacturing system. The vice of the first of these, according 
to Adam Smith, is its hostility to freedom of commerce, alias, to 
Free Trade ; and that of the second, hostility to all foreign trade. 
Adam Smith, perhaps, has done some good service, in neutralizing 
extreme opinions on either side, by the interposition and elucida- 
tion of some abstract propositions,, not less excellent than true, as 
cited above ; though the main object of his extended discussion 
of '* the mercantile system," as he calls it, seems to have been to 
advocate Free Trade, by setting up a man of straw, and then 
knocking him into pieces. There is really and naturally no hos- 
tility, nor by any possibility can there be hostility, between agricul 



THE MERCANTILE AND AGRICULTURAL SYSTEMS. 347 

ture and trade — trade being supposed to include manufactures, as 
in this case it does". If agriculture be supposed to comprehend all 
those pursuits which avail themselves of nature as a fundamental 
agent in the production of commodities required for the sustenance 
and convenience of the human family, manufactures and commerce 
may properly be denominated, as in fact they are, its agents or 
servants, to modify and distribute its products — modification, when 
required, being the function of manufactures, and distribution that 
of trade. They can not possibly be anything more ; and that is 
precisely the position which they occupy. 

In this relation, it can not but be seen that the hypothesis of any 
natural or artificial hostility between the agricultural and mercan- 
tile interests — the mercantile including the manufacturing — is 
stamped with absurdity. It will be admitted that there is no natu- 
ral hostility, and that there are the strongest motives for the con- 
trary state of feeling. How, then, can there be an artificial or 
factitious hostility? That, too, would be a moral impossibility. 
They are mutually dependent on each other. Agriculture being 
the basis of the manufacturing and commercial systems, the more 
there is done in the first, so much more the last two, as agents of 
the first, will have to do ; and vice versa, the more activity there is 
in the manufacturing and commercial systems, so much greater 
will be the demand on the activity of agriculture, which is here 
used in so comprehensive a sense as to be the chief producer of 
the materials on which these two agents rely for employment. 
These agents are the mere ministers of agriculture in everything 
they do. Without them, agriculture would have nothing to do, 
except to supply the mouths of the wigwam. The first transaction 
of barter, in skins or anything else, is the beginning of trade ; the 
first apron, or the first moccasin (sandal it would be in the east), 
that is made, is the beginning of manufactures ; and the first orna- 
ment that is attached to or interwoven in either, is an improvement 
in manufactures. These operations at once make a demand on 
the producers of the raw materials, and on that sustenance of the 
fabricators which come from the earth, the forests, and the waters; 
and every stage of progress in the manufacturing arts, and in that 
commerce which they give birth to, from these first and simple 
developments of human ingenuity, up to the production of the 
greatest luxuries, elegances, and refinements of the highest degrees 
of civilization, makes an additional demand on the products of 
agriculture, considered, as it is here, not only as comprehending 



348 IMPORTING MERCHANTS OPPOSED TO PROTECTION. 

all that the earth, but all that nature yields, to the industry and 
labor of man. There is no point of view, and no possible practi- 
cal operation of things, in which manufactures and commerce do 
not stand forth as the ministering agents of this other great and 
comprehensive interest — and only as ministers, so far as their in- 
fluence is reflective. It is impossible they should not, in all their 
operations, benefit agriculture ; and the greater and more active 
those operations are, so much greater the benefit. 

We are not unaware that certain artificial modifications of trade, 
in the shape of privilege, under legal provisions, may be urged as 
the ground of this hypothesis of Smith and others, and that it may, 
perhaps, be said and insisted that it is valid after all. The point 
here aimed at is abundantly answered in other parts of this work. 
Our only purpose here is to show that there was and is no just 
cause for the much ado that has been made by economists about 
the *' mercantile and agricultural systems;" that there is no such 
distinction for any practical purposes ; and that all that has been 
said and written about it, is a waste of argument, making confusion 
worse confounded. The artificial modifications of trade, alluded 
to, do not belong to this particular question, but are embraced in 
others, and are by us considered in those connexions. We main- 
tain, that, for practical purposes, no theory of " a mercantile sys- 
tem," such as we are now considering, can be set up as hostile to 
an " agricultural system ;" nor any theory of the latter as hostile to 
the former. This huge invention — for it is vastly huge — has 
been made thus vast, apparently, to make an impression, that there 
was really something in It ; or, peradventure, it may be accounted 
for, by the 'case of a man who has had the misfortune to plunge 
into a slough, and Is seen floundering about a long time before he 
can get out again. 

Not only is there no foundation for this theory of a " mercantile 
system," resting on the basis, and having the tendency, alleged by 
Adam Smith and others, but there is, perhaps, some reason, es- 
pecially in the United vStates, for alleging the existence of a " mer- 
cantile system," having interests directly opposite to those which 
Smith and his followers have made so prominent, viz., one opposed 
to a protective system. It is, perhaps, rather a principle, than a 
system — a principle which governs every merchant in his own 
isolated position, and on account of which ^ protective system is 
less favored among merchants engaged in foreign commerce, than 
among other classes, and with the country generally. They usually 



IMPORTING MERCHANTS OPPOSED TO PROTECTION. 349 

prefer freedom of commerce, that they may make their fortunes 
the quickest and , easiest, without any regard to the good of the 
country. Hence a very prominent " Journal," in the city of 
New York, professing to be neutral in politics, is supported as an 
advocate of Free Trade, by this interest. It may fairly be pre- 
sumed that this " JournaV^ did not take this tack from principle, but 
because it had the sagacity to see there was room and would be 
profit. Other journals of the country, on the same side of the 
question, usually advocate Free Trade from motives of political 
partisanship ; this for its own advantage, being in the heart of the 
greatest city of the continent, connected with foreign commerce. 

Adam Smith has well described the character of this class of 
merchants, as follows : " The merchants know perfectly well in 
what manner foreign commerce enriches themselves. It is their 
business to know. But to know in what manner it enriches the 
country, is no part of their business. This subject never comes 
into their consideration." Again : " The capital of a wholesale 
merchant seems to have no fixed or necessary residence anywhere, 
but may wander about, from place to place, according as it can 
either buy cheap or sell dear. The capital of the manufacturer 
must, no doubt, reside where the manufacture is carried on." He 
adds for his own purposes, as pleading for Great Britain, against 
the colonies : " Whether the merchant, whose capital exports the 
surplus produce of any society, be a native or a for-eigner, is of 
very little consequence." It is, however, of great consequence. 

Joshua Gee says : "Nothing of this kind," that is, zeal for pro- 
tection, " can be expected from the merchant, who only pursues 
his own business, and raises an estate by those things which the 
government permit the subject to trade in. He may get a great 
deal of riches by importing foreign manufactures for luxury and 
excess, when, at the same time, the nation is consuming its sub- 
stance, and running into poverty." The editor of the sixth edi- 
tion of Gee's work, 1755, also says: "It has been observed, that 
by the mutual opposition of those [merchants] who are engaged 
in different interests, they rather puzzle than give light to the ar- 
gument in debate; and I must confess that I have usually found 
gentlemen who are not engaged in trade more ready to entertain 
right notions of commerce, as it respects the advantage or disad- 
vantage of the public. Though otherwise know^ing and well 
skilled in their own way, few merchants give themselves the trouble 
to look further than what concerns their own particular interest." 



350 IMPORTING MERCHANTS OPPOSED TO PROTECTION. 

The point which we desire to fix here, is the position and inter- 
est of merchants engaged in foreign commerce: — their position is 
between home and the parts with which they trade ; and their in- 
terest is, to make all the money they can out of both. Hence, 
generally, they are opposed to restrictions, which are liable to 
come in the way of their interest. If they were to be personally 
engaged in this business for an age or a century, their interest and 
that of the country would be identical ; but as they wish to make 
their fortunes in a brief period, and retire, they do not like any law 
which may happen, at the present moment, to stand in the way of 
their greatest profits. 

The principle laid down by Ricardo, that " every transaction in 
commerce is an independent transaction," is peculiarly and forci- 
bly applicable here. The merchant, as such, is not a patriot, but 
a sharper. He does not trade for the good of his country, but 
for his own interest ; and his object, in every transaction, is to aug- 
ment his own fortune. He does not need to be told that it is bet- 
ter for him personally to profit at the expense of the public, than 
for the public to profit at his expense ; and he will suffer no com- 
punctions for an injury done to the country, which brings a benefit 
to himself. His reasoning is that he and all his are but as a drop 
in the bucket, or as a bucket-full out of the ocean. But the ag- 
gregate of all foreign commercial transactions, is made up exactly 
in this way: Every one of them "is an independent transaction," 
negotiated for a private and selfish end ; and nothing but protec- 
tive regulations of the government, having regard to the interests 
of the public, can secure those interests. 



PROTECTIVE DUTIES NOT TAXES. 351 



CHAPTER XXIIL 

PROTECTIVE DUTIES NOT TAXES. 

The Gain of Assumptions, without Proof, to one Party, and the Loss to the other by con- 
ceding thera. — The whole Controversy turns on the Proposition of this Chapter. — Popu- 
lar Instincts on this Subject. — Duties not the Cause or Measure of a Change in Prices. — 
The vast and comprehensive Spheres of Influence which bear on this duestion. — How 
they all tend to prove that Protective Duties are not Taxes. — The Causes Abroad and 
at Home, which produce the Effect. — A Protective System adequate for all Purposes 
of Public Revenue in the United Stales. — The Commercial Position of the United States 
will, for an indefinite Period, require Protection — An Arnty of Facts to establish the 
Proposition of this Chapter, with Comments. — Beasons of the Facts. — The great Misfor- 
tune of conceding, in the technical Use of Language, that Protective Duties are Taxes. 

In the same manner as Free-Trade economists have always as- 
sumed, that their theory is a science, they have also assumed, that 
protective duties aretRxes ; and in the same manner as the first has 
generally been conceded to them, so has the latter. It may also 
be remarked, that, in the same manner as they necessarily fall, by 
a discovery of the absence of their foundation-stone of science, so 
also the first, sole, and last objection that has been or can be made 
to a protective system, is undermined by a proof of the fact, that 
protective duties are not taxes. It is remarkable, too, that the 
affirmative of this proposition should have been so long conceded, 
without scrutiny, in the same manner as has been the case with 
the claim set up for the theory of Free Trade as a science. 

On this point, viz., whether protective duties be taxes, or not, 
hinges the whole controversy. Indeed, there never would have 
been any, except as it has generally been supposed, that all duties 
are taxes, measured by their amount. Whether the f)roposition 
at the head of this chapter, is equally true in all countries, we do 
not pretend to say. It will have been seen, by the ground already 
gone over, that a system of public economy can not be devised, 
that is equally applicable to all nations, nor to any two nations ; 
that, from the peculiar social organization of the United States, 
they occupy a peculiar position on this subject, as well as on 
others, in relation to other nations, but especially so on this ; that 
the government of the United States was made for the people, and 
designed for their benefit ; whereas, the governments of most, if 
not of all, of the countries with which we have commercial inter- 



352 PROTECTIVE DUTIES NOT TAXES. 

course, are designed for the benefit of the governing and superior 
classes ; and that labor, in those countries, by reason of such a 
design and operation of government, is deprived of a fair reward, 
depressed, degraded, enslaved. 

But the proposition, that protective duties are not taxes, may 
be equally true in other countries as in this, though not, per- 
haps, in an equal degree. The principle that makes it true here, 
will, in like circumstances, make it true everywhere, other things 
being equal. To the people of the United States, this proposition 
has become one of the greatest, one of momentous importance ; 
first, because it is generally believed and taken for granted, that 
all duties are taxes ; next, because this false assumption is the only 
objection to protective duties; and lastly, because, if protective 
duties, in the United States, are not only not taxes, but a rescue 
from taxation, and, as will be found, from an enormous system of 
foreign taxation, the argument for protection becomes one of great 
interest and of supreme force, as a duty of patriotism. 

Without attempting to philosophize here on the subject of instinct 
in man, it may be remarked, that the experience of the people of 
the United States, has awakened what we are disposed to call an 
instinctive apprehension in their minds, of an hostility between their 
labor and foreign labor, in the market of the world ; more espe- 
cially when the products of foreign labor are brought into our own 
market to compete v/ith home products. They feel that they want 
protection against it, and that protection will not be a tax, but a 
benefit. What they feel is true, and they are prepared to enter- 
tain the proposition above announced, before they hear the reasons, 
because it agrees with their experience. They who reason on this 
subject independent of experience and fact, and against both, may 
feel little respect for such deductions of the common mind. But 
there is argument in them notwithstanding. There is no Americar 
of experience and observation in these matters, and uninfected with 
the borrowed theory of Free Trade, -who is not prepared to find 
the proposition of this chapter sustained by facts. He anticipates 
it. It may perhaps be called the instinct of experience, or of na- 
ture prompted by experience and observation. It is a feeling cre- 
ated, not without cause, before the reason of it is clearly under- 
stood. We prefer to call it popular instinct — the instinct of a 
party which feels that its interests are exposed to invasion and in- 
jury, and that they need protection. 

The theory of Free Trade is, that duties not only increase 



PROTECTIVE DUTIES NOT TAXES. 353 

prices, but that they are the measure of the increase. It is not 
denied tliat duties on unprotected articles will enhance prices, and 
that for this reason they are taxes, as duties on tea, coffee, spices, 
and various other articles which can not be produced at home. 
But it is found by experience that they are never an exact meas- 
ure. Sometimes the increase of price on such articles is greater 
than the duties, and sometimes it is less — ordinarily less. Wheth- 
er it shall be greater or less, depends entirely upon supply relative 
to demand — a rule which governs prices in all things. The in- 
crease of prices of unprotected articles, subject to duties, is ordi- 
narily less than the amount of duties: first, because the producers, 
always aware of the duties in the market to which they send, are 
anxious to retain the market, and will therefore accept of less profit ; 
next, because they can generally afford it ; and thirdly, because, in 
regard to all such articles, there is always more or less of compe- 
tition in the places of their production. Except in cases of defect 
of supply, the prices will rarely rise by the measure of the duties. 
They generally fall short, by a moiety, more or less. This fact is 
a complete disturbance of the theory of Free Trade, and breaks it 
up entirely, inasmuch as the theory supposes that the prices are 
raised by the measure of the duties, which, if it ever happens, is 
merely an accident, and never the effect of the rule which Free 
Trade lays down. That duties on unprotected articles are gener- 
ally taxes, is true ; but it is not true that the duties are the measure 
of the taxes. 

It will be found, that protected articles fall into a very different 
position under duties, and that they are subject to a very different set 
of influences, as to the effect of the duties on the prices, when 
compared with the effects of duties on the prices of unprotected 
articles. Duties on the latter affect only two parties, viz., the for- 
eign producer and the home consumer, both of which will naturally 
be sensitive on the subject. The producers will be anxious to 
retain the market, and if they think they can sell as much as before 
the duties by not raising the prices — which is presumable — and 
if they find by calculation, that they can make more aggregate profit 
in this way, than by raising prices and selling less, they will most 
assuredly follow this course ; and the articles will come into mar- 
ket as cheap as before the duties were imposed, except, perhaps, 
the domestic jobbers and retailers will find an apology for the in- 
crease of prices and their own profits, by pointing to the duties. 
There may also be a foreign competition, when articles, such as 
23 



354 PROTECTIVE DUTIES NOT TAXES. 

coffee and many other things, are supplied from different foreign 
countries, which also tends to keep down prices. These obvious 
influences, except as they are overcome by defect of supply in the 
market, will naturally prevent prices from rising by the measure of 
the duties, according to the rule laid down above. All practical 
merchants will certify to the correctness of this view. They find 
'that prices, in some cases, and for a while, are scarcely affected by 
the duties on unprotected articles, except as advantage is taken of 
the fact of the duties in the home market ; and even then they 
rarely come up to the measure of the duties, which, as before re- 
marked, breaks up the Free-Trade theory on its strongest ground. 
For, if prices are raised by the measure of duties, as that theory 
alleges, it would most certainly occur in the case of unprotected 
articles, where there is no home competition brought into the field 
against foreign. 

But the case is widely different, when American arts, industry, 
and labor, come into competition, under a system of protection, 
against foreign arts and labor. The most vulnerable point of 
those systems of foreign despotism, which, for centuries, it may be 
said for ever, have held labor in the most abject condition, is as- 
sailed by an American protective system — and assailed to their 
great alarm and consternation. It is assailed by a young giant, 
conscious, or who ought to be conscious, of the strength of his po- 
sition, and of the weakness of his adversaries. And why are those 
systems of despotism alarmed, when they behold young America, 
not only rising and spreading herself in strength, but learning and 
practising those arts which hitherto have given Europe her ascen- 
dency over the rest of the world, and made all nations, the United 
States among the rest, tributaries to her greatness, her power, her 
thrones, her princes, her aristocracies, her towering pride, her 
pomp, her overgrown institutions, her vast wealth, and all those 
elements of earthly grandeur, which constitute her supremacy and 
her political sway ? Why is Great Britain alarmed at this spec- 
tacle? — -Because it is the starting up of a rival which she fears — 
and fears more than any other. And what is the specific ground 
of her fear? — Simply and only because she can not but foresee 
in this rivalship the cheapening of the products of her own arts 
and labor, in the United States, and all the world over — in the Uni- 
ted States, her best market,* and in the market of the world, which 

• The Collowins: facts will show the relative importance of the United States, as 
a market fur British manufactures. By a recent report of a committee of tbo 



PROTECTIVE DUTIES NOT TAXES. 355 

she had long endeavored to monopolize. The arts of Great Britain 
are (he tower of her strength — her great national bulwark. To be 
undersold and superseded in thenn, is to be undermined. 

In order to ascertain the influences which affect the prices of 
protected articles in the United States, and how they act, it is ne- 
cessary to consider the relative position of this country to Europe 
and other foreign parts, producers of the same things, on the sub- 
jects embraced in the question. It has already been shown, that 
Europe occupies a strong vantage ground, by having been first in 
the field of the arts, so as to have made superior attainments ; and 
more especially by having availed herself of the abject condition 
in which she has ever held labor, so that it does not cost her, on 
an average, more than one third of its cost in the United States. 
All that she gains by this usurpation — and the power is immense 
— is appropriated chiefly to that artificial aggrandizement, and to 
those prodigal expenditures, which, for the maintenance of her 
power and pride, characterize the nations of Europe. Europe 
has never yet found it necessary to use any considerable fraction 
of this power in a commercial rivalship with free states, inasmuch 
as such states have never risen up in any formidable shape, except 
in the case of the United States; and here our foreign commercial 
policy has generally been so lax and so fluctuating, as to give the 
states of Europe very little concern. They have still been able to 
go on, and appropriate the power they derive from the oppression 
of labor, as they have done from time immemorial. The arts of 
Europe have made the world tributary, including the United States; 
and the taxes which we, as well as other parties, have been accus- 
tomed to pay — and to pay without dreaming of the fact that it was 
a tax — to support the power and superiority of European nations, 
thus acquired, will astonish those who have never considered the 
subject, and which we shall endeavor, in the proper place, to lay 
open to view. 

But the point to which we desire, in this place, to direct atten- 
tion, is the fact, that, on account of the position of Europe, in rela- 
tion to the United States, and of the latter in relation to the former, 
politically and commercially, and on account of the large margin 

British house of commons, it appears, that Prussia consumes annually of British 
manufactures to the amount of 7 cents for each individual of her population; 
Russia to the amount of 16 cents for each individual; Norway, 17 cents; France, 
20 cents ; and the United States to the amount of 402 cents for each individual of 
our population ; and yet there is scarcely one of these articles which we could not 
produce, and generally at a lower price. 



356 PROTECTIVE DUTIES NOT TAXES. 

of profit which is derived from the cheapness of European lahor, 
Europe can not only afford to abate in the prices of the products 
of her arts, in case of necessity, in the starting up of new rivals, but 
that she actually does so when she is forced to encounter the rival- 
ship of American arts and labor enjoying protection under the gov- 
45rnment of the United States ; and that the entire scale of pri- 
ces, in regard to all the articles comprehended in such protection, 
whether the duties are prohibitory or not, is materially reduced in 
consequence of the adoption of the system. There may be, and 
doubtless are, some trifling and transient exceptions to this rule ; 
but none, as will yet be seen, which ever were, are, or can be, a 
burden or tax to any party or person in the United States, when 
all the benefits of the system to every party or person are con- 
sidered. 

It has already been seen, that the theory of Free Trade, which 
avers, that prices are enhanced by the measure of the duties, fails 
even in its application to unprotected articles, where it might natu- 
rally, and at first sight, be expected, that it would hold good. But 
even there practice subverts and demolishes the theory. How much 
more when it comes to encounter the stupendous influences which 
are brought into action by a collision of European arts and labor 
with American arts and labor ? This strife is the shock of empires, 
literally, without a figure ; and the theory of Free Trade, so far 
as its doctrine of prices and taxation is concerned, has no more 
chance to establish a footing in this warfare, than the poor traveller 
in the Alps, who finds himself swept into the deep abyss below, 
and buried for ever, by an avalanche that comes thundering from 
on high. Prices are of little account to the nations of Europe, 
especially to Great Britain, in this struggle, so long as the sacrifices 
are merely negative — so long as money is not lost — and even that 
may be endured for a season. It is a strife for relative ascendency, 
advantage, power, in which such sacrifices are made by them, in 
hope of victory. Ever since the American fathers, while under 
the crown, began to supply their own wants, down to this time, and 
so far as the people have succeeded, with or without protection, 
the prices of the articles they have produced, have been cheapened ; 
never more than under a protective system ; never so much, or so 
fast. The competition is a vast and comprehensive system of com- 
mercial rivalship, in which nations, the greatest and most powerful, 
are engaged, by their systems of commercial policy; in which they 
have long been engaged, and were never so active and jealous as 



PROTECTIVE DUTIES NOT TAXES. 357 

at this momenta The consequence is, that the prices of articles 
comprehended in these schemes, have been reduced, generally and 
particularly, to a degree which could never have been experienced 
without this competition. 

There is not only a large margin in Europe to reduce prices, by 
the wrong that is done to labor there — though no more of it will 
be used than what is absolutely necessary — but there is an im- 
mense, an inexhaustible power in the United States to do the same 
thing, under an adequate system of protection, much of which has 
already been employed to that end. The power here consists 
chiefly in the cheapness of our government, the freedom of our in- 
stitutions, the enterprise of the people, the increase of population, 
increasing wants, and the vast physical capabilities of the country. 
Two things only render a protective system necessary to us : Our 
inferiority in the arts, and the higher price of labor. The first may, 
perhaps, cease to exist, in progress of time ; but the second can not 
cease to make the same demand for protection, as it now does, so 
long as our social organization and that of other foreign parts re- 
main the same. American labor must be sustained, which can 
only be effected by a system of Protection, against cheap foreign 
Jabor. But after securing to labor a proper reward, under an ade- 
quate system of Protection, the remaining power of sustaining a 
commercial competition with Europe and other parts, so as to re- 
duce the prices of protected articles lower than European produ- 
cers under their system of taxation can afford, will be ample, and 
must necessarily be so employed by the force of competition, so 
long as competition can be sustained ; and when that ceases from 
abroad, it will only be because American power has won the day 
in the market of the world, when it will still go on reducing prices 
of the same articles at home, by domestic competition, as is ac- 
knowledged by M. Say, in the following words : "A government 
can not, by prohibition, elevate a product above the natural rate 
of price ; for, in that case, the home producers would betake 
themselves, in greater numbers, to its production, and by competi- 
tion, reduce the profits upon it to the general level." Ricardo also 
confesses the same. 

We have said, in substance, that American power — ability we 
mean, all things considered — under a properly-adjusted system, is 
amply sufficient to reduce, and to go on reducing, the prices of 
protected articles, till there shall be no foreign competition, in the 
existing state of the world, adequate to withstand or check it 



358 PROTECTIVE DUTIES NOT TAXES. 

One fraction of the power, not inconsiderable, which abides 
with the American people, under proper protection, to oppose that 
power which European states have usurped from labor, will be 
absorbed at home in the proper compensation of American labor. 
This is the first and grand object, and is indispensable to the per- 
petuity of our social organization. But beyond and behind that, 
are vast and inexhaustible faculties, which may be appropriated to the 
same great end, to wit, to fortify American labor in its rights, and 
to goon cheapening the products of art and manufacture, as would 
naturally and necessarily be the result of domestic competition, 
and of the wide market -of the world w^iich w^ould open before 
such a system and such enterprise. 

When" once the arts shall have attained to a measure of improve- 
ment in the United Stales, equal to that of Europe, and labor at 
the same time being adequately protected, the power of the coun- 
try will be vastly superior to that of Europe, or of any other parts, 
to cheapen protected articles. An established and reliable system 
of protection, recognised as the permanent policy of the govern- 
ment, not again to be disturbed or impaired, would invoke and 
draw abundant capital into every branch of manufacture, call into 
existence new arts, put all the energies of the people into active 
exertion, extend competition in every enterprise, till every city and 
villaofe would be filled with artists and mechanics, and the whole 
country crowded with workshops and manufactories, to pour plenty 
into the lap of industry, and to give profitable employment to 
every laborer. The farmer would feed the mechanic, the planter 
supply raw materials for the manufacturer, and every occupation 
of life would open a market for other occupations. All the prod- 
ucts of art would grow cheaper and cheaper by competition, and 
still each of those pursuits would be a good business, by Increased 
demand at home and abroad, till every nation on earth would be 
rivalled in the market of the world, in every product of the man- 
ufactures and the arts, simply because no other nation has so much 
inherent power to cheapen such products as the United States. 
Tlie nations of Europe can not give back to labor what they have 
robbed it of, or use all this power in commercial competition, and 
maintain their existence. They may use a part of it successfully 
against the United States, so long as we are not adequately pro- 
tected ; but after that, all their efforts and sacrifices will be In vain 
till they abandon their system of usurping the rights of labor, which 
would of course be their destruction, as to the existing forms of 
society. 



I 



PROTECTIVE DUTIES NOT TAXES. 359 

The cheapness of the American government, and the economy 
of its institutions, as contrasted with the prodigal expenditures of 
European governments and society, exhibit one vast item of the 
power of which we are now speaking; and it is shown in another 
place, that the very revenues of the American government, raised 
by a properly-adjusted system of protection, not being taxes, may 
be made one of the most effective means of national wealth, of 
which it is possible to conceive. Such is the position of this coun- 
try, such her power, such her capabilities, moral and physical, and 
such her social organization as intended and accomplished, if not 
perverted, if faithfully carried out, and if sustained in her career 
to the consummation of her possible destiny, that all the expenses 
of government, and all war-debts not swellingbeyond any probable 
amount now in prospect, may be defrayed, and a sound credit 
maintained, without taxing the people a penny ; that is, by a sys- 
tem of protection, the avails of which shall be equal to all these 
purposes, at the same time that it promotes and secures the inter- 
ests of all and of each, without being a burden or tax to any ; at 
the same time that national wealth shall go on augmenting, with- 
out interruption, without measure, and without end. 

The influences of an American protective system all tend to the 
reduction of the prices of protected articles, and not, as Free 
Trade asserts, to their augmentation. This appears, first, from the 
fact that an earnest show of establishing and maintaining a protec- 
tive policy in the United States, produces instantaneous alarm in 
Europe, on account of the importance of our commercial position, 
and impairs their power to maintain the prices of their products in 
our market; secondly, because it is manifest from the reason of 
the case, that such a collision of great commercial interests, in the 
way of competition, by extending the scale and multiplying the 
competitors, must necessarily reduce prices ; thirdly, because the 
collision is actually a shock of two vast commercial spheres, coming 
athwart each other in hostile encounter, in which a nice adjustment 
of small things is not to be thought of; and fourthly, because the 
actual and uniform operation of protection in the United States, is 
to reduce the prices of protected articles, as shown farther on 
in this chapter. No man has ever yet been able to point to a 
single article, the price of w|jich has been permanendy raised 
by a protective system; whereas the proofs on the other side 
are overwhelming. No reasonable mind can resist them. It is 
true, indeed, that we have the utterances of Free-Trade theorists, 



360 PROTECTIVE DUTIES NOT TAXES. 

concocted in the closet, and thrust upon the public with a boldness 
in the inverse ratio of the reasons and facts. Ne^ct, we find them 
incorporated in presidential messages, and treasury reports, sent 
forth with such a sanction, without shame or compunction, showing 
that men occupying the position and burdened with the responsi- 
bilities of statesmen, nan be as innocent, because they are as igno- 
rant, as the schoolboy who rejoices in the first achievements he 
imagines he has made in figures, when the master comes along and 
boxes his ears for his blunders. The advocates of Free Trade 
have too much complacency in their theory, and are too much sub- 
limated thereby, to be disturbed by facts. They are like the Mis- 
sissippi steamboat, which the Yankee in London boasted could 
jump the snags and sand-banks, and could hardly be held up at 
watering-places. We are aware it may be said that such disre- 
spectful treatment of opponents is rather a falling down from the 
dignity of grave argument. But it is written by high authority, 
" answer a fool according to his folly." How is it possible to rea- 
son with those w^ho contemn the facts of all history, and require 
faith in their dogmas, against all experience? And when a presi- 
dent of the United States and his secretary of the treasury, have 
both flown off into the clouds, American citizens who are obliged 
to stay behind, in the vulgar w^alks of life, may be excused for 
thinking it meet to look after their own affairs. It is strange — the 
wonder of the age — that the people of the United States could 
have been so profoundly, so fatally duped, as of late, on this great 
and momentous subject ; and not less strange, that the highest pub- 
lic functionaries of the land should have ministered to the imposi- 
tion. 

The first class of facts which we propose to notice, to show that 
protective duties tend to reduce prices, and actually reduce them, 
instead of raising them, as the advocates of Free Trade allege, will 
be found in the history of the manufacture of cotton in the United 
States, so far as it relates to this question. 

Cotton goods which cost 85 cents a yard before the tariff of 
1816, have been reduced to 7 cents. Cotton shirtings have fallen, 
under the system of protection, from 25 cents a yard to 5 ; sheet- 
ings, from 32 to 7 ; checks, from 32 to 8 ; striped and plain ging- 
hams, from 26 to 8 ; printed calicoes, from 20 in 1826, to 9 in 
1844 ; — each of the above being supposed to be of the same qual- 
ity at the high and reduced prices. The fact that the British gov- 
ernment have been obliged to enact differential duties for their 



PROTECTIVE DUTIES NOT TAXES. 361 

eastern dependencies, first of 5 per cent., then of 8J, next of 10^, 
and finally of 15, to exclude American cotton goods, is conclusive 
evidence that the American manufacturers can and do sell cheaper 
than the British. This is a great, a stupendous result. 

From 1S09 to 1814, before cotton was manufactured in the Uni- 
ted States, the British duty on the raw material was 255. 6d. per 
cwt., or nearly 5^ cents a pound. From 1815 to 1819, it was 85. 
6d. per cwt., or nearly 2 cents a pound. At last it got down to 2 
farthings a pound, and that was taken off, as before shown/or pro- 
tecdon against American competition. But for American cotton 
manufactures, the American cotton-grower would have been in the 
power of the British government at this moment, with a duty 
against him in England of 5^ cents a pound on cotton, more or 
less. 

There is no doubt, if this domestic and world-wide competition 
had not been brought into the field by the American protective sys- 
tem, the prices of cotton goods would yet have been kept up much 
above what they are at present. This is a moral certainty, than 
which nothing can be more certain. Although the reduction of* 
prices by such a cause, can not be measured with precision, yet no 
one, looking at the causes, as they operate in all such cases, would 
deem it extravagant to conclude, that, if the monopoly of cotton 
manufactures had been retained by Great Britain, and consequently 
the control of prices, we and all the world should have been pay- 
ing at this moment, at least an average of one hundred per cent, 
more for this species of goods, than the present prices. There are 
the facts on the one side, in the history of the reduction of prices; 
and there are the known principles of human nature on the other, 
establishing the moral certainty as to how men will act in given 
circumstances ; that is to say, monopoly is not addicted to cry out 
against its own prices, or to reduce them, except by the fear or by 
the fact of competition. 

But the British differential duties, above cited, enacted expressly 
and solely to protect their own manufactures, in their own remote 
or proximate dependencies, against American competition in those 
quarters — enactments still continued for the same purpose, at the 
highest rate of duties above named, the lower having proved insuffi- 
cient — are evidence which no man can gainsay, incontroverlibly 
conclusive, if it had been possible to entertain a doubt as to what 
is proved on this point, in the history of the redaction of prices, 
as above narrated. Each of these two kinds of evidence sustains 



362 PROTECTIVE DUTIES NOT TAXES. 

the other, and the second, being a demonstration, imparts the same 
character to the first. 

It is the general influence of a protective system which affects 
details. It is seen in its results. In the setting-up of cotton man- 
ufactures in the United States, under legislative encouragement, 
this country started up a great commercial rival to a great commer- 
cial nation, in this particular — to a nation with which this species 
of production was of vital importance — to a nation which had not 
only been accustomed to supply us, but the world, with these prod- 
ucts, with little opposition. The effect of this competition on so 
large, so vast a scale — in a sphere which in prospect embraced all 
nations — was, as might have been expected, and as accords with the 
experience of the v^^hole commercial world at all times, soon very 
perceptible in the reduction of prices. The influence was even 
more comprehensive than that on the articles protected. It affected 
trade generally in the same way, as is always the case. Every ar- 
ticle within the range of protection went down, and was kept down 
by protection, whether the duties were prohibitory or not. It is 
the general influence, and the influence in the long run, for a course 
of years, which tells most emphatically on this question, as the 
history of reduction of the prices of cotton goods, since the Ameri- 
can protective system was spread over this species of merchandise, 
will show. — And this general influence comprehends all particular 
cases — not one of them escapes. 

They who refuse to give up to such facts as these, defend them- 
selves by pointing to the prices current of the protected articles in for- 
eio-n markets, and in the American market, by which they think they 
have a show of vindication, inasmuch as, in some cases, they can, by 
this means, prove lower prices abroad than at home. This, however, 
is a very narrow, altogether too restricted a view of the facts that be- 
long to the question. In the first place, they leave out of the ac- 
count the general reduction of prices that has already been produced 
by the protective system, which is the principal item that claims to 
be considered. Next, they do not consider that these foreign pro- 
ducers, especially in articles prohibited from the American market, 
have been restricted to a narrovyer sphere of trade, and conse- 
quently to one of a more active competition between themselves, 
which of course reduces prices in those quarters lower than they 
would otherwise be. Thirdly, they do not consider the accidental 
surpluses which are accumulated in Europe, by bankruptcies and 
over-production, which, if the American market were open, would 



PROTECTIVE DUTIES NOT TAXES. 363 

be floated off this way, to keep up prices ; and which, indeed, even 
under the most restrictive system, will, in large amounts, make 
their way here, and be sold at a sacrifice on the cost. And fourthly, 
they do not consider, that, as soon as these restrictions are removed, 
the contest between the competitors, and the fact of cheap goods, 
will both be of short duration, and when Europe shall have beat 
America, goods will be higher than they were before — as is uni- 
versally found to be the fact. At this moment, three months after 
the commencement of the operation of the tariff of J 846, while we 
are writing this page, European goods are imported at prices 
cheaper than they can be afforded here. The reason is twofold : 
first, to dispose of the surpluses in foreign markets ; and next, on 
the principle disclosed by Lord Brougham, in the following words 
of a speech made by him in the house of commons, after the close 
of the war of ] 812 : " It is well worth while by this glut,[excessive 
exports to America] to stifle in the cradle those rising manufactories 
in the United States." As soon as they are stifled, or in any de- 
gree checked, by such means, prices will rise. The fall is no per- 
manent good, but an evil, because prices will in the end be higher 
than they ou^ht to be — all for the benefit of foreign producers. 

Such is the natural operation of a protective system in the Uni- 
ted States, and such is the natural result of disturbing it. The 
system reduces prices generally and greatly ; the removal of it re- 
duces prices only slightly and transiently, soon to rise again, higher 
than they were before. 

Very little was done in the manufacture of woollen goods in the 
United States, on a large scale, till after the enactment of the tariff 
of 1824. This species of manufacture had been carried on, more 
or less, in families, from as far back as in the early history of the 
colonies, by the hands of the wives and daughters of the yeopianry 
of the land, whose husbands and fathers kept a small flock of sheep 
for the supply of the raw material. This home-made cloth, accord- 
ing to the doctrine of the Free-Trade economists, was a very ex- 
pensive way of supplying wants, inasmuch as the labor expended 
in producing them, could have produced many times the value in 
agriculture and other ways ; which may be beautifully true in theory, 
if these economists could as easily find a market for those other 
things. But it was necessary that the people should have clothing ; 
they had not, and could not get money, to buy it from abroad ; 
and they therefore went to work and made it in their own houses, 
as the Free-Trade economists say, at vast expense. How was it 



364 PROTECTIVE DUTIES NOT TAXES. 

a great expense ? — They employed the surplus labor of their own 
hands, for which they could get nothing, in any other way ; or so 
economized their time and affairs, and so interchanged labor, neigh- 
bor with neighbor, for the different parts of the work, that they pro- 
duced home-made cloth, without costing them a penny out of 
pocket. Was not that economy, in spite of the doctrine of the 
Free-Trade school? — Or rather, did not their necessities in- 
vent and reduce to practice the most salutary principles of public 
economy? — This way of supplying home-made clothing of all 
kinds — or nearly all that necessity requires — is within the recol- 
lection of many persons now living ; and it is still practised exten- 
sively by farmers, who consider it good economy, when they think 
of what their means of buying such things are. and how much 
more profitably such means can be appropriated to other purposes ; 
and all this when these products, made in this way, cost ten, or 
twenty, or in some cases perhaps fifty times as much labor, as the 
same imported articles do. This, the Free-Trade economists say, 
is a waste — a tax. But the farmers who still wear home-made 
cloth, are of a different opinion. They know that they are saving 
•money, and growing rich faster, by it ; and they will leave it off 
just so soon as, and no sooner than, they discover, by experience, 
that they can supply these wants with less labor applied to other 
objects. 

But the tariff of 1824 gave a new and vigorous impulse to the 
manufacture of American w^oollen goods, on a large scale ; and the 
tariffs of '28 and '32 increased the impetus of the movement. 
Large inveistments were made in woollen manufactories in various 
parts of the country, and they have continued to increase, from 
that time to this, under somewhat various and fluctuating encour- 
agement. But being begun, even under less and insufficient pro- 
tection, they could not be closed, without a sacrifice of capital. 
They have struggled on, sometimes doing a profitable business, 
and sometimes losing money. On the whole, the profits of this 
business have been so small, that, if the unstable policy of the gov- 
ernment had been foreseen, it is more than probable that most of 
these establishments would never have been set up. They have, 
however, produced all kinds of cloth, from the lowest prices up to 
the highest; but those of the highest have generally proved un- 
profitable, on account of tlie comparative imperfection of the arts 
required for producing them. 

But the prices of woollen fabrics of the more common sort have 



PROTECTIVE DUTIES NOT TAXES. 365 

fallen immensely since they began to be produced in the United 
States, under a system of protection, in the same manner as in the 
case of cotton fabrics ; though not by so large a per cent, as in the 
latter, inasmuch as competition in cotton manufactures, between 
this country and Europe, has been in existence nearly or quite 
twice as long as the competition in the production of woollens, as 
stimulated by protection. So far as we have been able to learn, 
we should not hesitate to hazard the statement, that the average 
reduction of prices of woollen goods, in common use, in twenty 
years is now fifty per cent, on the average cost that time ago; and 
the low-priced woollens, in which American competition could be 
better sustained, have fallen in price more rapidly and more con- 
siderably — especially under the tariff of 1842. Woollen jeans, 
of the same quality which sold in 1840 at 65 cents a yard, sold in 
1846 for 35 cents. A correspondent of the Journal of Commerce, 
understood to be one of the editors, found a Yankee trader, at 
Cleveland, Ohio, in the summer of 1846, who had settled in Can- 
ada, buying satinets and other low-priced woollen goods, who said 
he could pay the duties, on entering Canada, and make more on 
them, than to get British goods at Montreal. In this case of thef 
Yankee from Canada, it is seen, that the American prices, subject 
to the British duty on entering Canada, were more favorable to the 
trader than the same kind of British goods without duty. It is a 
very strong case of fact, and as far as it goes — and it seems to 
comprehend the entire range of low-priced woollen goods — it is 
conclusive. 

But the experience of the whole country — of all the people — 
will answer for itself. It is sufficiently welJ known, that the above 
statements are in harmony w^ith the facts which constitute that ex- 
perience. Woollen goods have been constantly cheapening, under 
a system of protection, and of a more widely-extended competition ; 
and there is no reasonable mode of accounting for the facts, con- 
sidering how rapid and great has been the reduction of prices, ex- 
cept that it is occasioned by the operation of protective measures. 
It is the natural result of bringing into a commercial rivalship the 
interests of two grand commercial spheres, each of which aims, not 
only to supply its own market, but to put in for the market of the 
world, against the other. Each is aware how much is at stake, 
and each is resolved not to be beaten, but if possible to beat. It 
has been seen by the facts and reasonings of the preceding pages, 
that neither the arts nor labor of the United States can compete 



366 PROTECTIVE DUTIES NOT TAXES. 

with those of Europe, without protection, because the arts here are 
comparatively imperfect, and the labor costs three times as much. 
It has also been shown, that, with adequate protection, any article 
that can be produced at all in this country, can be produced at a 
lower price than in any other ; and that the power of the country 
is ample for that purpose, under, and only under, a protective sys- 
tem. This explains all the facts of our history now under consid- 
eration, and there is no other explanation. The facts are indispu- 
table, and these results have been repeatedly brought forward in 
evidence. And why do they not avail to establish the doctrine of 
reduction of prices by protection ? Simply and only because they 
do not accord with the theory of a " science falsely so called." 
Still the facts abide ; the results are uniform ; and they can not be 
otherwise explained. It is said, indeed, that if you abate or abol- 
ish the duties, the prices will be reduced ; and it is admitted, that, 
in most cases, it will be so in some degree, and for a transient pe- 
riod. But this is answered above. It is simply the effect of the 
struggles of an adversary that has been worsted, who, seeing his 
hopes revived by the imprudence of the other party, makes a new 
effort, and risks new sacrifices, to recover his former advantageous 
position ; and who will show little fav^or, when once he has 
gained it. 

Iron, if not the greatest interest of the country, all things con- 
sidered, is the most important. It enters into every person's wants, 
and into his constant use, and no one can do without it in a variety 
of forms. It constitutes the most prominent necessity of war, of 
peace, of agriculture, of manufactures, of commerce, and it maybe 
said, of every pursuit of life. It enters even into the finest embellish- 
ments of the arts. Time, that most momentous of all movements, 
carrying with it the destinies of all nations, and of all men, can not 
be accurately measured in its progress, without it. 

By the wise arrangements of Providence, the necessities of man 
and of society are abundantly provided for, in this particular, in 
the mineral wealth of the United States. The iron-beds of this 
country have already been ascertained to be inexhaustible ; and 
what is not of less importance — greater, indeed — the qualities of 
iron produced from the ores found here are the best in the world. 
The question is, whether this immense and boundless field of 
American wealth shall be protected and husbanded ; or whether it 
shall be abandoned to everlasting repose, for the sake of giving 
profit to British producers and manufacturers of this article, and 



PROTECTIVE DUTIES NOT TAXES. 367 

income to the British exchequer ? It is alleged that free trade in 
this article will bring it cheaper to the people of the United States. 
Suppose it should, that which is nominally cheaper is not always 
the cheapest. The main proposition, however, is flatly and con- 
fidently denied, with the additional averment, that adequate and 
permanent protection of the home product and manufactures of this 
article will afford it, in all forms, at lower prices to the people than 
could be obtained from any other quarter, besides the advantages 
to the country of the home trade. The prices of the British mar- 
ket to-day, or this year, are no rule for to-morrow, or next year. 
They are as variable as the winds, and as fickle in their disposition 
— governed chiefly by their chances of obtaining the American 
market, or for want of it. When it is gained, and the American 
product is repressed, their prices are sure to be high ; and when it 
is wanted, they are low% 

The protective system over iron and its manufactures began in 
the United States when prices were very high, and the consequence 
has b^en a uniform and gradual reduction of prices. Take, for 
example, the extracts, in the note below, from the report on iron 
of the convention of the friends of domestic industry, held in the 
city of New York, November, 1831, signed "B B. Howell, Sec- 
retary."* 

• " Statement B. — Showing the effects of a tariff of protection on the article of 
iron at Pittsburg and Cincinnati : In the years l8l8-'l9-'20, bar iron in Pittsburg 
sold at from $190 to $200 per ton. — Now the price is $100 per ton. In the same 
year boiler-iron was $350 per ton. — Now at $1-10 per ton. Sheet-iron was but lit- 
tle made in those years, and sold for $ 18 per cwt. — Now made in abundance, and 
sold for $8.50 per cwt. Hoop-iron, under same circumstances, was then $250, and 
is now $120. Axes were then $24 per dozen, and are now 12. Scythes are now 
50 per cent, lower than they were then — as are spades and shovels, /row hoes 
were in those years $9 per dozen — now a very superior article of steel hoes at $4 
to $4.50. Socket-shovels are made at $4.50 by the same individual who, a few 
yeas ago, sold them at $12 per dozen. Slater's patent stoves, imported from Eng- 
land, sold in Pittsburg at $350 to $400. — A much superior article is now made 
there and sold for $125 to $150. English vices then sold for 20 to 22| cents per 
lb.; now a superior article is sold at 10 to 10|. Brazier's rods in 1824 were im- 
ported, and cost 14 cents per lb., or $313.60 per ton. — Now supplied to any 
amount of i to § diameter, at $130 per ton. Steam-engines have fallen in price 
since 1823 one half, and they have one half more work on them. The engine at 
the Union rolling-mill (Pittsburg), in 1819, cost $11,000 — a much superior one 
of 130-horse power, for Sligo mill, cost, in 1826, $3,000. In 1830, there were 
made in Pittsburg 100 steam-engines. In 1831, 150 will be made, averaging 
$2,000 ; or $300,000 in that article alone. A two-horse power engine costs $250; 
six-horse, $500; eight to nine horse, $700. These last are the prices delivered 
and put up. At least 600 tons of iron made in Pittsburg are manufactured into 
other articles before it leaves the city, from steam-engines of the largest size, down 



368 PROTECTIVE DUTIES NOT TAXES. 

Under the system of low duties, in the latter stages of the opera- 
tion of the compromise act, down to the tariff of 1842, as is well 
known, the iron interest, in its raw products and manufactures, suf- 
fered greatly in Pennsylvania and elsewhere ; and it is equally 
well known, that it revived again, to an astonishing degree, under 
the tariff of 1842, cheapening manufactured articles in proportion 
as the manufactories were multiplied, and competition extended. 
These facts are so recent, and come so directly within the obser- 
vation and experience of the public, as not to require a detail of 
evidence. They demonstrate the general truth, that home products 
of manufacture, under Protection, tend invariably and uniformly to 
reduce the prices of the articles. That the prices of the raw ma- 
terial should be well sustained, is as desirable as that those of agri- 
cultural products should be ; and that some of the forms of iron 
manufacture, such as railroad iron, had not got down to the lowest 
British prices, results from the twofold consideration, first, that 
immense capital was required to estabhsh them, and next, that the 
policy of Protection was not regarded as sufficiently secure to incur 
the risk. But the experiments made in this and other branches of 
iron manufacture, hitherto, in their incipient stages, and embarrassed 
as they have been for want of confidence in the disposition of the 
government, demonstrate, satisfactorily, that, under a system of per- 

to a threepenny nail. Eight rolling and slitting mills, of the largest power, are in 
the city of Pittsburg, five of which have been erected since 1828. Thirty-eight 
new furnaces have been erected since 1824 in the western parts of Pennsylvania, 
and that part of Kentucky bordering on the Ohio river, most of them since 1828. 
The quantity of iron rolled at Pittsburg was, in 1828, 3,291 tons, 19 cwt. ; in 
1829, 6,217 tons, 17 cwt. ; in 1830, 9,282 tons, 2 cwt. Being an increase of nearly 
200 per cent, in two years. The above facts were furnished by members of the 
committee residing at Pittsburg, who vouch for their accuracy. 

" Prices of Iron at Ciiicinnaii.— In 1814 to 1818, bar iron $200 to $220 per ton ; 
now $100, $105, $110. The fall in prices has been neeirly as follows : In 1826, 
bar iron, assorted, $125 to $135; in 1827, $120 to $130; in 1828, $115 to $125; 
in 1829, $112.50 to $122.50; in 1830, $100 to $110 ; in 1831, $100 to $110. Cast- 
ings, including hollow-ware, 1814 to 1818, $120 to $130 per ton; present price, 
$60 to $65, and the quality much improved." — National Magazine, June, 1845. 

It appears from the same document, that hamhiered iron, at a duty of $22.40 per 
ton, sold at less than it did at a duty of $9. It also increased the revenue from 
that source, which, under the law of 1816, at a duty of $9, was two millions and a 
half; and under the law of 1828, at a duty of $22.40, was five millions and a half. 
These are by no means remarkable facts. It is the uniform operation of the pro- 
tective system, to cheapen the protected articles, and to augment the revenue. 
Under such a system, foreign producers can no longer have their own prices, be- 
cause they alone have not the market, but are obliged to sell under the effects of 
competition ; and the domestic producers meeting with foreign competition, are also 
influenced in the same way, all for the benefit of consumers. 



PROTECTIVE DUTIES NOT TAXES. 369 

manent and secure Protection, every branch of iron manufacture 
would afford its products at lower prices than to depend on im- 
ports. American railroad iron, in 1846, had got to be lower than 
the British product was in 1836, free of duty. 

The effect of protection on brown sugar, in reducing prices, is 
remarkable, as shown, in part, by the tables of the secretary of the 
treasury, in his annual report of December, 1846 (pp. 720, '21). 
The variations there found correspond with what would be expected 
from the two causes of competition and amount of the home crop. 
In 1816, when we were dependent on the foreign product, the pri- 
ces of brown sugar ranged from 14^ cents a pound to 16^. In 
1820, after Protection had begun to produce its effect, it was down 
to from 8^ to 12^ cents. In 1825, it was down to from 7^ to 10 
cents. In 1831, to from 5 to 7 cents. In 1834-'5, to from 5^ to 
6. This year was a large crop. Mark how the price was affected 
in 1835— '6, when the crop fell short of the year previous by about 
one third. It rose to from 10 to 11 cents, not because there was 
no supply in the foreign market, but because we were dej)endent. 
From that time to 1842-3, the home crop being good, and grad- 
ually increasing, prices gradually fell, when that year the home crop 
was unusually large, and the price was reduced to from 3f to 4 
cents. In 1843~'4, the home crop was small, and prices rose to 
from 5J to 6| cents. Again, in 1 S44-'5, with a large home crop, 
prices were from 3f to 4f cents. It should be remarked, that all 
this while, nearly twenty years, a part of the supply was from 
abroad, and the foreign and domestic products were brought into 
competition, the 'consequence of which was the reduction of prices. 
But the moment the competition was diminished, by the falling off 
of the home crop, up went prices. 

Mr. Calhoun proved by figures — or claimed to have proved — 
when the tariff of 1842 was under debate, that the duties of that 
bill on hemp and its manufactures would be a tax on the cotton 
interest of $1 ,422,222 a year. Mr. Toombs, of Georgia, of the 
29th Congress, who, as a southern man, would naturally sympa- 
thize with Mr. Calhoun on this subject, in view of the facts, also 
proved by figures, while the tariff of 1846 was under debate, that 
Mr. Calhoun had been entirely wrong in his calculations and pre- 
dictions, and that the protection given to hemp and cotton-bagging, 
by the tariff of 1842, had not only lowered prices, but lowered 
them more even than Mr. Calhoun predicted it would raise them. 
"Since the introduction of the business of making cotton -bagging 
24 



370 PROTECTIVE DUTIES NOT TAXES. 

in Kentucky," said Mr. Toombs — "since our own countrymen 
have come into competition in producing it — the price of bagging 
has fallen to less than one third of its average price before that 
period. . . We now make good bagging in Kentucky more than 5 
cents per yard less than it cost in Dundee, in 1842, and for 3 or 4 
cents a yard less than the present price in Scotland" — (See Na- 
tional Intelligencer, August 29, 1846). The price of cotton-bag- 
ging, in 1838, ranged from 18 to 20 cents per yard ; in 1841, from 
25 to 27 ; in 1846, from 8| to 9^. Bale rope, in 1838, from 7 to 
8 cents per pound ; in 1841, from 11 to 12 ; in 1846, from 3 to 4. 
And yet the secretary of the treasury, in his report of December, 
1846, in the face of these facts, being guided by his theory, repre- 
sents the duties of the tariff of 1842 on these articles, as "an enor- 
mous tax that inures to the benefit of about thirty manufacturers". 
He is forced, however, to call the facts "a mystery." — "We are 
unable," he says, " to get any key to this mystery, from the actual 
prices since the duties were imposed". If Mr. Calhoun had not 
predicted that the prices would rise, and put down the rise in fig- 
ures, so that there is no getting away from them, then the secretary 
might have solved the " mystery," by saying, it is true that prices 
have fallen, but they would have fallen as much more as the duties, 
without them. He does indeed give this reason in another part of 
his report"; but he hardly had courage enough to give it in juxta- 
position with a recognition of these facts, and therefore he called 
them a "mystery." 

The price of window-glass, in 1824, when a duty of $3 per 100 
feet was imposed, was $10.50 per 100 feet. In 1828, price $6.50. 
In 1846, price of 8-by-lO, most used, $2.25, under a duty of $2. 
The cut-glass works at Wheeling, Virginia, were forced to stop 
before the tariff of 1842. Under that tariff, they had more orders 
than could be supplied, and sold for 25 per cent, less than before. 
The flint-glass works of the United States, in 1832, were in num- 
ber 17 ; reduced to 5 in 1842 ; rose to 19 under the tariff of that 
year ; labor in them rose 25 per cent., and the articles produced 
fell 25 per cent. So generally in the glass business. 

In a report of the committee on manufactures (House Doc. 420, 
1st sess. 28th Congress), it was proved, that the depression in the 
prices of 23 different kinds of manufactured iron, under the influ- 
ence of the tariflf of 1842, ranged from 10 to 46 per cent. — average 
reduction 23 per cent. ; that, in a list of 22 different and chief ma- 
terials of shipbuilding and rigging, such as had been imported, the 



PROTECTIVE DUTIES NOT TAXES. 371 

fall of prices, from 1842 to 1844, ranged from 2 to 35 per cent. 
— average reduction 17^ per cent.; that, in a list of 9 articles of 
hardware, protected by increased duties in the tariff of 1842, the 
fall of prices ranged from 13 to 30 per cent. — average reduction 
15 per cent.; and that, in a numerous list of other manufactured 
articles of various kinds, exhibited in the tables of that report, the 
reduction of prices, under the tariff of 1842, which afforded them 
the protection of increased duties, had been effected in some such 
measures as above ched. The evidence presented in that report, 
of the tendency and effect of Protection to reduce prices of manu- 
factured articles, was uniform, decided, and unanswerable. No 
one has ever yet been able to point to a single manufactured arti- 
cle, in extensive demand, enjoying protection for home production, 
the price of which has not been reduced; and the higher the duty, 
the greater tlie reduction of prices. 

It would be very easy to compile a volume of facts in evidence 
on this point, if it were necessary. But who will say, that those 
above given, are insufficient to prove, beyond all controversy or 
doubt, that protective duties, in the United States, reduce the prices 
of manufactured articles? " Every production," says a " Southern 
Planter," in his " Notes on Political Ecconomy," " the result of 
Protection in the country, has been brought cheaper and better 
into the market, than before such Protection." — " Practical men," 
said Mr. Clay, in the senate, in 1832, " understand very well this 
state of the case, whether they do or do not comprehend the causes 
which produce it. I have, in my possession, a letter from a re- 
spectable merchant, well known to me. After complaining of the 
operation of the tariff of 1828, on the articles to which it applies, 
some of which he had imported, and that his purchases having been 
made in England, before the passage of that tariff was known, which 
produced such an effect upon the English market, that the articles 
could not be resold without loss, he adds, * for it really a])j)€a7's, 
that, when additional duties are laid upon an article, it then be- 
comes lower, insiead of /</o7/er.' " 

It is marvellously singular, how, for want of fact and sound argu- 
ment, the strongest evidence of reduced prices by Protection, has 
been seized upon to decry Protection as producing a contrary ef- 
fect, as in the case of minimums, which have invariably reduced 
prices. When the price was reduced, the duty, on the minimum 
principle, would appear to rise — did rise, in respect to the real 
value ; and therefore it is said to be an exorbitant duty ! In this 



372 PROTECTIVE DUTIES NOT TAXES. 

way, a minimum duty, beginning, say at 50 per cent, ad valorem, 
has sometimes mounted, by reduction of prices, to an ad-valorem 
duty of 200, or 250, or 300 per cent. " Behold !" says the sage 
member of Congress — for this argument has been used by that 
class of persons, in public debate — "behold!" he says, "what 
enormous duties ! what enormous prices ! what enormous profits !" 
Is it not mortifying to an American citizen, to be obliged to witness 
such ignorance or such dishonesty — for one or the other it mu3t 
be — in the legislators of the nation ? This very 300 per cent, ad- 
valorem duty, on an article bearing a minimum duty equal to 50 per 
cent, ad valorem, when the law was passed, and still the same, is 
arithmetical demonstration, that the price had been reduced to one 
sixth of what it was when the duty was imposed. The higher ad- 
valorem estimates rise by the operation of minimums, so much 
greater the reduction of price ; and vice versa. But it is, or ought 
to be, enough, that everybody knows by experience, that manufac- 
tured articles in extensive use and demand, are cheaper under pro- 
tective duties, than under low duties, or Free Trade ; and that a 
protective tariff, like that of 1842, enables the people, more espe- 
cially the poor, to supply their wants, as a whole, at less cost, while 
they do better in all their pursuits, and are more prosperous. You 
can not convince the poorest and most ignorant man, who buys his 
shirt for less than the duty on that species of goods, that he pays 
the duty. It was the duty that cheapened it ; and if he were to 
believe, that he is taxed with the duty, he must believe, that, with- 
out the tax, he should have got his shirt for as much less than noth- 
ing as the difference between the duty and price ; and that the 
tradesman who sold him the goods, should not only not have sold 
them, but give?i them to him, and the difference between the duty 
and price to boot. In that way the tradesman, at least, would pay 
the duty. But the truth is, nobody pays it, if it is a domestic 
product, as in such a case it must be. 

Facts enough have been exhibited, and argument enough made, 
as is hoped, to show, that the general influence of a protective sys- 
tem, in reducing prices of manufactured products, is so entirely 
comprehensive, that no article can escape its beneficent effect, in the 
long run. Attempts have been made by demagogues — we are sorry 
to say that presidents and secretaries of the treasury have been found 
in this category — to make the poor believe, that they are wronged 
by protective measures, as well in their rights of labor, as in the 
enhanced cost of panufactured products most necessary to them. 



i 



PROTECTIVE DUTIES nSt TAXES. 373 

Some of the most reckless and groundless statements on this point, 
totally unsupported by facts or reason, were made in the presi- 
dent's annual messages, and in the annual reports of his secretary 
of the treasury, for 1845 and 1846. The very argument on mini- 
mums, considered above, and others of the kind, equally false and 
deceptive, were made by both of these high functionaries. One is 
at a loss whether such attempts proceed from a defect of under- 
standing or vice of heart. The truth is, that no class of society is 
so much benefited by protection as the poor ; first, because all low- 
priced products of manufacture, most necessary to them, such as 
cottons, woollens, &c., are cheapened by this policy in a greater 
proportion than any other ; and next, because no interest is benefited 
so much as that of labor, by a protective system, as shown in other 
parts of this work. It is on all low-priced articles of manufacture, 
used by the poor, that American arts and labor can compete most 
successfully with foreign arts and labor, and it is the prices of these 
articles which are first and most considerably reduced under an 
American protective system. Nothing is more evident than this, 
as shown by the facts displayed above, and as brought within the 
reach of common observation.* 

* The secretary of the treasury, in his annual report of December, 1845, which 
announced the project of the tariff of 1846, laid down this doctrine, that " the 
duty must be added to the price, and paid by the consumer — the duty constituting 
as much a pari of the price as the cost of the production." Also, that prices would 
fall by the amount of duties taken oflf. But immediately on the passage of the 
tariff of 1846, which reduced the duties on salt, the price of Turk's Island salt 
rose, in the place of its production, fifty per cent. Liverpool salt and low-priced 
cotton goods also rose in England, by the same cause, viz., the news of the reduc- 
tion of the American tariff. So also the prices of sugar and molasses, in the for- 
eign places of their production, rose by an amount equal to the reduction of the 
American duties. These facts show, first, that the foreign producer, and not the 
American consumer, is benefited by the reduction of our protective duties ; next, 
that the foreign producer, and not the American consumer, pays the protective 
duty; and thirdly, that the American consumer o^a protected article is injured by 
the same amount in which the foreign producer is benefited, by the reduction of 
duties. The loss is all American ; the gain all foreign. 

Observe the following quotations of prices of sugar in August before, and in 
December after, the tariff of 1846 went into operation : — 

Prices of Sugars. 

Aug. 12. Duty. Dec. 28. Duty. 

St. Croix 7i a 8f 2| cts. per lb. 8 a 9 If cts. per lb. 

New Orleans 5| a Tf 2^ cts. " 7a8 If cts. " 

Cuba Muscovado... 6i a 7| 2| cts. « 7a 8 If cts. « 

PortoRico 6^a8 2| cts. " 6| a 8^ U cts. « 

Next compare the promised average Free Trade price with the real Fr«»e-Trade 
price : — 



374 PROTECTIVE DUTIES NOT TAXES. 

It may be useful here to present some of the reasons, not already 
suggested, of the facts, above adduced, to prove, that protective 
duties are not taxes, but a rescue from taxation. 

When a duty is imposed on an imported manufactured article 
from Great Britain, or elsewhere, to encourage its domestic pro- 
duction, it is presupposed, that the home producer could not com- 
pete with the foreigner without the duty, and consequently could 
not stand. It must be seen, then, in such a case, that the foreign 
producer has the market, and will have his own price. There is 
nothing to limit his price, but the competition from foreign quar- 
ters. That competition can not give the American consumer the 
benefit of cheap foreign labor; for that is chiefly absorbed in an 
enormous system of taxation, which is never relaxed, except in the 
political competitions of the commercial policy of nations. Then 
it is made to bear with tremendous energy on the prices of wages 
and capital in the United States ; and a small fraction of the great 
difference in the cost of money and labor in these two quarters, 
will answer all the purposes of such a policy, when the American 
laborer and producer are not protected by their own government. 

But in ordinary private competition, in foreign quarters, for the 
market in the United States, cheap foreign labor is no benefit to 
the American consumer. He saves not a penny on that score. 
Even in the action of the commercial policy of foreign nations, his 
benefit is small, which is more than counterbalanced by other facts 
under the control of foreign powers and foreign factors, so long as 
home production can not come into the field of competition. When 
it does, of course he is benefited ; and that is the object contended 
for by protection. 

So long, therefore, as foreign producers of manufactured articles, 
which might be produced at home, under a system of protection, 
can command the market of the United States, these articles will 
always come at the highest prices that can be commanded by the 
advantageous position of the producers, which amounts to absolute 
Promised average Free-Trade Price. Real Free-Trade Price. 

St. Croix 6 a 7^ 25.92 per cent, higher. 

New Orleans 4^ a 6 42.85 « " 

Cuba Muscovado 5^ a 61 30.43 " " 

Porto Rico 5ia6| 28.00 « « 

An average of 31.80 per cent, dearer under Free-Trade. 

The consumers of sugar were told that the tariff of 1842 made New Orleans 
BUgar 2^ cents per pound dearer, this being the amount of duty; or in the lan- 
guage of the secretary of the treasury, above cited, " the duty constituting as 
much a part of the price as the cost of production." 



PROTECTIVE DUTIES NOT TAXES. 375 

control, except in their competition with each other. Being to- 
gether interested to make money, and to make the most possible, 
they will not sell at loss, but only at profit. 

In the first place, then, all the difference between the cost of 
money and labor in the United States and those quarters — not less 
than 100 per cent. — is absorbed by the system of taxation where 
the goods are produced, and more too — far more, as a part of gov- 
ernment policy, when it is known that there is no competition to 
operate against them, in the market where the goods are going. 
That system of taxation is enormous, and for Great Britain, was 
once described by Henry, now Lord Brougham, as follows : — 

" Taxes on every article that enters the mouth, or covers the 
back, or is placed under the feet ; taxes upon everything that is 
pleasant to see, hear, feel, smell, or taste ; taxes on everything on 
the earth and the waters under the earth — on everything that 
comes from abroad, or is grown at home ; taxes on the raw mate- 
rial, and on every new value that is added by the art and labor of 
man ; taxes on the spices that pamper man's appetite, and on the 
drug that is administered to his disease ; taxes on the ermine that 
decorates the judge, and on the rope that hangs the criminal ; taxes 
on the rich man's dainties, and on the poor man's salt ; taxes on 
the ribands of the bride, and on the brass nails of her cofEn ; — at 
bed, or at board, lying down or rising up, we must pay. The 
school-boy spins his taxed top ; the beardless youth -manages his 
taxed horse, on a taxed saddle, with a taxed bridle, on a taxed road ; 
and the dying Englishman, pouring his medicine, which has paid 
7 per cent., into a spoon that has paid 15 per cent., flings himself 
back on his chintz bed which has paid 22 per cent., makes his will 
on a stamp which has paid eight pounds (sterling), and expires in 
the arms of an apothecary, who has paid 100 pounds (sterling) for 
the privilege of putting him to death. His whole property is then 
taxed from 2 to 10 per cent, in probate, and large fees are de- 
manded for burying him in church. His virtues are handed down 
to posterity on taxed marble, and he is gathered to his fathers to 
be taxed no more." 

No, not so. For if the marble which perpetuates his name and 
celebrates his virtues, can last so long, he is taxed till the morning 
of the resurrection ! Taxed for the privilege of coming into the 
world, taxed all the way through it, taxed on his passage out of it, 
and taxed ever after ! 

This immense, comprehensive, stupendous system of taxation, 



376 PROTECTIVE DUTIES NOT TAXES. 

falls, in varied and complicated forms, on the English producers 
of the manufactured articles consumed by Americans, and enters 
into the price of them as a principal part, when there is no protec- 
tion to guard against it ; and that price, in such cases, is higher, 
always, and much higher than it would be, if the articles could be 
produced at home, under a system of adequate protection. 

To all this must be added the profits of the commercial agents 
or factors, engaged in the sale of these goods, the charges of clear- 
ance, transportation, and entry, and a variety of expenses accumu- 
lated in such transactions between remote countries. Is it a mat- 
ter of surprise, then — should it not be expected — in view of all 
these facts, that the same goods which can be produced at home, 
under protection, will be afforded to the consumers cheaper, while 
the laborers, and all the parties concerned in the business, are well 
paid, on the American system of wages and other values? Such, 
evidently, is the aspect of the facts, and the reasons are obvious — 
demonstrate the facts, which, being facts, need no other proof 

The American consumer of foreign manufactured articles, there- 
fore, which might be produced at home, under protection, though 
be obtain them free of duty, derives not the smallest fraction of 
benefit from foreign cheap labor ; nor is he in any manner or de- 
gree taxed by protective duties which oblige him to supply his 
wants at home. He gets them cheaper. There may be, and 
doubtless are, exceptions to this rule, as, for example, in the infancy 
of a domestic production, which has received protection for the 
sake of starting it ; or in the slow progress of another, the protec- 
tion of which is inadequate, or too insecure by political agitation, 
to invite sufficient capital to give it strength and vigor, and to open 
a wide field of domestic competition. In some such cases, the 
prices may be augmented temporarily; not permanently, however, 
when the policy of protection is considered as settled. The mo- 
ment a product of manufacture has received adequate protection, 
considered as secure, capital rushes into it, to fill the market, and 
reduce prices by competition to the lowest point of a fair profit. 
And all experience in the United States proves — the above-cited 
facts prove — that all interests engaged in domestic manufactures, 
capital, wages of labor, prices of raw materials of home produc- 
tion, the wages of all the variety of employments which they create, 
pay of agents, carriers, and profits of merchants engaged in the 
trade, can all be sustained, and well sustained, on the American 
system of wages and profits, when the consumers obt^m them at a 



PROTECTIVE DUTIES NOT TAXES; 377 

lower rate than they would be afforded by importation, fn the 
case of importation without competition, the consumers are in the 
power of foreignersrand of a foreiojn system of enormous taxation ; 
and they can not escape from the burden, in the shape of high pri- 
ces, resuhing therefrom. In the case of home production, under the 
American system of society, which costs little, and might be. en- 
tirely sustained by protective duties alone, at the same time that 
they cheapen the articles protected, the consumers are rescued from 
the power of foreigners, and all parties engaged in supplying their 
wants are well paid, while those wants are supplied at a lower rate, 
and with a better article. If a person or party, here and there, 
may have to pay a little more for the supply of a particular want, 
in the first stages of home production, before competition enters the 
field, the benefits such a party receives from the general system, 
much more than counterbalance this alleged tax, so that, on the 
whole, it is not a tax. 

It is a great misfortune to this subject, that economists first, the 
schools next, statesmen third, the press fourth, and the public fifth, 
like a flock of sheep, that jump with a leader, have all consecu- 
tively, and in the end together, been accustomed to take for granted 
that all duties are taxes. Who can resist such a common error, 
and turn men's minds back to reason, when the very persons, 
statesmen, conductors of the press, and others, who know it is an 
error, are yet so much creatures of habit, as to call all duties taxes, 
without discrimination ? Hence the advantage of their antagonists 
—both parties call the same thing by a misnomer. To allow that 
they are taxes is giving it up. There can be no argument after' 
that, except in the following form, which is indeed unanswerable : 

" So that a thing is made and supplied at home, it matters little 
whether it costs more or less. This is broad ground, and needs 
some illustration, because, if true, it does away all the objection 
that can be offered to a protecting tariff. It makes all the difference 
to the country, taking in its rounds and interchanges of labor, 
whether a dollar is laid out at home, or abroad, in buying an article. 
When it goes to a foreign country to buy a thing, it is gone for ever, 
and becomes the- capital or dollar of that country, after it makes 
one operation only. Whereas, if you lay out that dollar at home, 
, in the neighborhood, or next village, or next state, or district, for an 
article, it remains in the country, and is still a part of the capital of 
the country. It does infinitely more than that, because it circulates 
and repeats its operation of buying an article perhaps one hundred 



378 PROTECTIVE DUTIES NOT TAXES. 

times, possibly a thousand times, and in its rounds serves the pur- 
poses of a hundred or a thousand dollars, as the case may be. In 
the grand rounds of its circulation, it touches'as many springs of 
industry, as it does hands, and is all the time doing good. When 
it shall have done all this, or while it is doing it — for the thing 
nevpr ends — it is still a dollar, and counted properly among the 
dollars or the capital of the country. Figures can't calculate the 
difference, therefore, in expending a dollar at home or abroad ; 
even the geometrical ratio can't accumulate fast enough to realize 
this difference. It outstrips everything but the human imagination 
in its progress. If the article should cost 10 per cent, more than 
the foreign, it is ten times made up in this grand round we have 
alluded to by the rapid repetition of the thing. It is again made 
up in the way that prices tally, or adapt themselves to each other. 
If the seller of the article gets a little more, he in his turn pays a 
little more to the laborers, and they a little more to the farmers, they 
a little more to the hands, and so on all round the circle, until a per- 
fect equilibrium is not only restored, but kept up between all, and all 
prices quadrate into a perfect system, that, in the rounds, can not 
make the least difference as to the cost or difference of price."* — 
[^Nof.es on Political Economy by a Southern Planter.'] 

* This point is well illustrated by the following bills, from Hunt's Merchant's 
Magazine, May, 1841, which, it is there stated, are made out, as nearly as could 
be ascertained, according to the prices in that place, in the years specified. 
1820. The Town of Londonderry (N. H.), Dr. 

To 1000 yards of broadcloth, at $4 $4,000 

CONTRA. 

By 4,000 bushels of apples, at 12| cents $500 

By 1,000 barrels of cider, at $1 1,000 

By 1,000 cords of wood, at $1 1,000 

By 2,000 bushels of potatoes, at 25 cents 500 

By 1,000 turkeys, at 50 cents 500 

By 1,000 bushels of corn, at 50 cents 500 

Account balanced. $4,000 $4,000 

1840. The Town of Lcmdmderry, Dr. 

To 1,000 yards of broadcloth, at $5 $5,000 

CONTRA. 

By 4,000 bushels of apples, at 25 cents $1,000 

By 1,000 barrels of cider, at $2 .2,000 

By 1,000 cords of wood, at $3 3,000 

By 2,000 bushels of potatoes, at 37| cents 750 

By 1,000 turkeys at $1 1,000 

By 1,000 bushels of corn at 75 cents 750 

$8,500 

Balance in favor of the town $3,500 



PROTECTIVE DUTIES NOT TAXES. 379 

Is not this plain — conclusive — even if prices are raised? Some 
may say, that this benefit does not reach all ; that it is partial in its 
distribution, being a tax to some, while it is a help to others, which 
is tJie evil complained of. With such minds there is no reasoning. 
The above description is precisely the operation of the protective 
system, when, in some cases, and for a season, under a prohibitory 
duty, the manufacture of a protected article is starting, and before 
home competition has reduced prices, the prices are a little higher. 
The consumer, no matter who he is, is benefited in so many other 
ways, under a protective system, by cheapening most of the protected 
articles he has occasion to use; by giving him employment, if he 
lives on wages ; or whatever be his calling or position, by making 
it better and more productive to himself, in a prosperous state of 
society, that it is impossible he should not participate in the general 
welfare, so as to more than compensate for this supposed burden, 
which, how^ever, is only imaginary. When the duty is not pro- 
hibitory, the protected article is never dearer, but always cheaper 
necessarily, by bringing home competition into the field against for- 
eign. The prices current in a foreign market prove nothing against 
this, however they may seem to do so ; for the moment these pro- 
tective duties are removed, as in the tariff of 1846, the foreign 
prices rise, just in proportion to the prospect of obtaining the 
American market, and when once they shall have gained it by 
breaking down th^American producer, they will haye their own 
prices, which will be higher than under a protective system. Even 
prohibitory duties reduce prices in the end, in the case of articles 
in general demand, if the system of protection be reliable, and 
capital dare venture into the business to a sufficient extent, as it 
always will, if protection is secure. 

Such are the superior qualities of American iron, for example, 
and such the exhaustless beds of its ore, that nothing is required 
but permanent, secure protection, to afford every manufactured 
iron article demanded by the wants of society, cheaper than they 
could be obtained from England, or from any other quarter. Many 
of them had already begun to be cheaper under the tariff of 1842. 
But it requires time, confidence, and immense capital, to perfect 
all the manufactures of iron ; and while marching to perfection, the 
prices would be satisfactory, beneficial to the country, and beneficial 
to all parties. If iron manufactures are discouraged, and languish 
in this country for want of protection, England will take advantage 
of it, and raise her prices higher than they would have been under 



380 PROTECTIVE DUTIES NOT TAXES. 

an American system of protection, giving poorer iron as she must, 
and poorer articles. The moment the tariff of 1846 passed, iron 
rose in England, and fell in the United States, proving that the lion 
was roused for his prey, and that his victim could not resist. If it 
proves that American prices, in this case were higher, it proves 
also, that English prices will not keep down. The level to which 
they tend, will be at the cost of this country, not only in the de- 
struction of its labor, its business, and its capital, on an immense 
scale ; not only in drawing off its cash ; but ultimately, in the aug- 
mentation of the prices of the articles imported. The same may 
be said of coal, though not falling under the head of manufactures. 
Iron and coal are among the greatest and most important interests 
of the United States, the working of which was yet in a state of 
infancy, when the tariff of 1846 came to cripple giant twins, and 
strangle them in the cradle. They had begun to scatter their bles- 
sings with a liberal and profuse hand. No one felt himself to be 
taxed — no one was taxed; none were poorer; all were richer; 
even though prices current in England might be quoted to prove 
that prices were lower there. It proves nothing, except that Eng- 
land waits for another and better market, that she may raise her 
prices on her victims, which she will certainly do, when rivals are 
out of her path. 

The commercial troubles of England, which came to a crisis in 
the latter part of 1847, left vast quantities oifc-ailroad and other 
iron in the English market, which must be disposed of. Under the 
reduction of duties on iron by the American tariff of 1846, it was 
found that orders on England, in such a state of things, could be 
executed for the American market at prices ruinous to the Ameri- 
can manufacturer. These extreme low prices of English iron 
were the transient result of the want of money there to use it on the 
railroads for which it was prepared. It must necessarily be the same 
with other British merchandise, at such a time. But this does not 
militate against the above facts and reasoning ; it only proves that sur- 
plus products, accumulated by bankruptcy and commercial distress, 
must be pushed off at any price. By the ad-valorem rule of the 
tariff of '46, the duty on iron which is $18 per ton when iron is 
$60, falls to $12 when iron falls to $40, and to $9 when it comes 
down to $30 ; so that protection, on this principle, is greatest 
when it is least needed, and least when it is most needed. 



A RESCUE FROM FOREIGN TAXATION. 381 



CHAPTER XXIV. 

AN AMERICAN PROTECTIVE SYSTEM A RESCUE FROM FOREIGN 

TAXATION. ' 

The Method and Rule of this Argument, as laid down by a Public Document and Joshua 
Gee. — A Showing, from the Principles of this Rule, and by Public Documents, of the 
foreign Taxation which the People of the United States have been and are still sub- 
jected to. — Adam Smith's and MCulloch's Evidence on this Point. — Taxes of foreign 
Nations, of whom we purchase, enter into the Prices of their Products to us. — The Prin- 
ciples of the Tariff of 1846, as they bear on this Point. — Returns of British Commerce 
as compared with those of the United States. — The Aggregate of foreign Taxes paid 
by the United States since 1791. — A Protective System the sure and only Way of Rescue 
from foreign Taxation. 

Having shown in the preceding chapter, that protective duties 
are not taxes, but quite the contrary, it is also necessarily proved, 
by the same argument, that Free Trade is itself a tax, in proportion 
as Protection reduces the prices of manufactured articles ; in pro- 
portion as it raises and sustains the prices of labor ; in proportion 
as it raises and sustains the prices of agricultural products and 
other raw materials of home production ; and in proportion as a 
protective system tends to promote and secure all the great and 
minor interests of the country, and the interests of all parties and 
persons therein, as shown in the preceding chapter, and elsewhere. 
But these great positive benefits of Protection are not what we now 
propose to notice, although their effect is a rescue from taxation, in 
all that the absence of Protection- operates as a burden. Our de- 
sign now is rather to consider how a well-adjusted protective sys- 
tem rescues us from a stupendous burden of foreign taxation. 

The following extract from a public document, house of repre- 
sentatives. No. 296, 3d session, 27th Congress, pp. 500 and 501, 
will indicate both the material and method of our present line of 
argument: — 

" England levies no direct taxes upon her colonies, or rarely is 
it done. But by indwect taxes, they give four fifths of their pro- 
ductive wealth to the mother-country. It was that support which 
she derived from the thirteen [North American] colonies, and it 
was for that alone she resisted their independence. She desired to 
produce, and that they should be forced t» consume; and of all that 



382 AN AMERICAN PROTECTIVE SYSTEM 

they consumed [of imports from the mother-country], at lesiSt four 
fifths went into the national treasury at home, after supporting her 
farmers and mechanics. . . It is generally alleged, that a man pays 
15 shillings for the use of government, out of every 20 shillings he 
spends in England. Some have stated the public tax at 17 shil- 
lings in the pound. Let us lake one instance in the article of beer. 
The land pays a tax ; the barley, when malted, pays an excise of 
6 pence per bushel ; hops pay one penny a pound ; the beer, when 
brewed, pays an excise in some cases greater than the original 
value ; all the persons who labor in the premises, contribute to the 
national revenue, by their sundry consumptions, to the amount of 
three foxnths of the whole price of their labor. It follows, then, 
that the people of this country [the United States] contribute in 
like proportion to the support of foreign governments, upon all that 
they purchase. In 1S36, we imported more than $70,000,000 
worth of foreign articles/zee of duty. The effect was, that they who 
purchased [consumed] these articles, paid not one cent to the sup- 
port of our own government, while at least four fifths [$56,000,000] 
of that amount went into the treasuries of foreign governments, to 
support kings on their thrones, parhaments that make laws prohib- 
iting our productions, and foreign armies and navies !" 

The principle of this rule is correct; but there is an error in 
supposing that the ''''four fifths''' taxation of the colonies all goes 
into the public exchequer. It is divided between the government 
and those domestic parties who trade with the colonies. The gov- 
ernment gets the smallest part directly; but indirectly, the wealth 
derived by these other parties from this source, is an essential part 
of the basis of the government. It matters not to the colonies, 
whether the taxation be direct through the government, or indirect 
through its commercial policy. It is taxation. 

The specification here made of the different forms of tax on be3s, 
is a good deal short of the truth. In M'Culloch's statistics of the 
British empire, will be found nineteen specifications of duty and 
excise on this article, and the whole amount of revenue raised from 
taxes on beer in 1834, not including the land tax, was over six 
millions sterling, or twenty-nine millions of dollars. 

The above citation from a congressional document, is corrobo- 
rated by Joshua Gee, as follows : " If we examine into the circum- 
stances of the inhabitants of our plantations [the American colonies] 
and our own, it will appear, that not one fourth 2)art of their own 
products redounds to their own profit ; for out of all that they by ing 



A RESCUE FROM FOREIGN TAXATION. 383 

here, they only carry back clothing and other accommodations for 
their families, all of which is of the merchandise and manufacture 
of this kmgdom." Of course, the other three fourths, entering 3nto 
the prices of these articles, were absorbed by the profits of British 
trade in the premises, and by the taxes of the domestic empire, 
and the colonists were compelled to pay four to one of the actual 
costs ; or, as Gee says, more than four to one. 

In the analysis of these statements, we have the picture of the 
manner in which the two thirds of the value of European laboi, 
usurped as shown elsewhere, is absorbed by the governments and 
the superior classes of society ; and beyond this, we are also com- 
pelled to observe, that the necessaries of life, purchased with the 
remaining thirds called wages, to support the existence of the la- 
borers, is burdened with that very system of taxation represented 
in the above extracts. " All the persons who labor in the premi- 
ses, contribute to the national revenue, by their sundry consump- 
tions, to the amount of three fourths of the whole price of their 
labor." The taxes, whatever they are, enter into the prices, even 
of the articles which the laborers consume, after they are deprived 
of two thirds of their fair reward. 

Now it must be seen, that this stupendous system of taxation 
enters into the prices, and composes a part of the prices of all the 
articles imported from Europe to this country, and is borne by the 
American consumers. That is to say, these taxes are paid by us, 
to the extent of our consumption of these foreign products, and to 
the amount of the fractional parts of the prices which are composed 
of the taxes, they being the largest part. -The statement in the first 
of the above extracts, is, that we paid $56,000,000 of these taxes 
in 1S36, as we understand and have interpreted the rule in brackets, 
in that place. This result is obtained, first, by deducting the re- 
exports of that year from the free imports — which, according to 
the official tables of 1845, were upward of $92,000,000 — and 
then taking four fifths of the remainder. But nothing can be more 
evident than that we are taxed for imports paying duty, as well as 
for those free of duty. The princijjle of the rule, therefore, laid 
down in the public document, above cited, would simply require, 
first, the deduction of re-exports from the sum of imports, and four 
fifths of the remainder is the amount of taxes we pay the nations 
from which the imports are derived. Inasmuch as we have proved 
that -protective duties do not augment, but reduce, the prices of 
manufactured articles ; and if it be supposed that the reduction 



384 AN AMERICAN PROTECTIVE SYSTEM. 

of prices on protected articles be equal to the augmentation of 
prices on those not protected, in consequence of duties, then the 
imports paying and not paying duty, occupy precisely the same 
position under this rule. In any case, the difference between the 
reduction of prices on protected articles, and the augmentation of 
prices by duties on the unprotected, if there be any, and so far as 
there is, is too trifling to be worthy of consideration here. 

Applying this rule, as here explained, to the official tables of 
1845 (Ex. Doc. No. 6, pp. 942 and 943), omitting fractions of 
millions, and counting a million when the fraction is over 500,000, 
we come to the following result : — 

That, for the imports of 1821, we paid foreign taxes to the amount of $33,000,000 

For those of 1822 49,000,000 

For those of 1823 40,000,000 

For those of 1824 45,000,000 

For those of 1825 50,000,000 

For those of 1826 48,000,000 

For those of 1827 45,000,000 

For those of 1828 54,000,000 

For those of 1829 46,000,000 

For those of 1830 45,000,000 

For those of 1831 66,000,000 

For those of 1832 62,000,000 

For those of 1833 70,000,000 

For those of 1834 83,000,000 

For those of 1835 103,000,000 

For those of 1836 134^000,000 

For those of 1837 96,000,000 

For those of 1838 82,000,000 

For those of 1839 1 16,000,000 

For those of 1840 71,000,000 

For those of 1841 90,000,000 

For those of 1842 70,000,000 

For those of 1 843 46,000,000 

For those of 1844 77,000,000 

For those of 1845 81,000,000 

It is not meant that the whole amount of this showing has been 
a positive tax to the United States. How far it was so, will appear 
by-and-by. 

These results, it will be observed, are obtained by the rule of 
taxation alleged in the document above cited, viz., that an average 
of four Ji/ths of the prices of these imports, before they start for 
our market, is composed of taxes, in one form or another. But 
suppose it is not more than three fourths, which is the proportion 
specified by Joshua Gee, as above cited, who is a British authority 
that had no motive for stating it too large, but the contrary — then 



A RESCUE FROM FOREIGN TAXATION. 385' 

the proper result will be obtained by taking the total of the re- 
exports for the above-named years, from the total of imports, and 
three fourths of the remainder will be the required items, instead 
of four fifths, as they now stand above. 

Joshua Gee's rule of ^^ three fourlhs''* is quite strong enough for 
our purpose, and is perhaps as near the truth as the rule of ^^four 
fifths^'' cite(J from the public document. Without being at the 
trouble, therefore, of going over these operations of figures by the 
tables again, to find each item by a separate process — no small 
task, as will be seen — let them all be supposed reduced, or actu- 
ally reduced, if any choose the latter, in a proportion as from four 
fifths to three fourths of their several integral sums, and let these 
be the results severally, instead of those above obtained by the rule 
of four fifths. But the principle and result of the argument will be 
the same. 

But in Fisher's National Magazine for August, 1845, is an ab- 
stract from the official records of the treasury department, exhib- 
iting a list of imports into the United States, from 1830 to 1844, 
inclusive, fifteen years, not enumerated in the tables above cited, 
amounting to an aggregate of $151,259,565, or an average of up- 
ward of ten milHons a year, six tenths of which came in free of 
duty. But whether they paid duty or not, is no matter in the 
present case. This official proof of such a large amount of im- 
ports, not enumerated or presented in the usual official tables, 
occurring without interruption for fifteen years, when the treasury- 
department may be supposed to have been under better regulations 
than formerly, and more reliable in such "accounts, is presumptive 
evidence that at least an equal, probably a greater, proportion of 
the imports previous to 1830, back to 1791, as far as the official 
tables go, is also wanting in those tables. To balance this defect 
of the tables, therefore, thus established beyond any reasonable 
doubt, we have supposed that the above results, showing the 
amount of foreign taxation which enters into the cost of our im- 
ports, and obtained from a calculation of four fifths instead of three 
fourths, are not probably too large, and may therefore fairly stand 
as they are, as not being materially, if at all, in excess of Joshua 
Gee's rule, viz., three fourths instead oi four fifths. 

It ought, perhaps, to be held quite unnecessary to attempt to 
show that the taxes of a nation, whence we import for consump- 
tion, enter into the prices of the articles, and are paid by the con- 
sumers. But in a work of this kind, every point made requires 
25 



386 AN AMERICAN PROTECTIVE SYSTEM 

to be fortified. Adam Smith has some good reasoning on this 
subject, which it may be well to cite here : *' All taxes, and all the 
revenue which is founded upon them — all salaries, pensions, and 
annuities, of every kind — are ultimately derived from some one 
or other of these three original sources of revenue [rent, profit, and 
wages], and are paid, either immediately or mediately, from the 
wages of labor, the profits of stock, or the rent of laftd." — '* The 
real value of all the different component parts of price, it must be 
observed, is measured by the quantity of labor v^^hich they can, 
each of them, produce or command. Labor measures the value 
not only of that part of price which resolves itself into labor, but 
of that which resolves itself into rent, and of that which resolves 
itself into profit. In every society, the price of every commodity 
resolves itself into some one or other of all these three parts ; and 
in every improved society, all the three enter, more or less, as 
component parts, into the price of far the greater part of commodi- 
ties. In the price of corn, for example, one part pays the rent of 
the landlord, another pays the wages or maintenance of the labor- 
ers and laboring cattle employed in producing it, and the third 
pays the profit of the farmer. These three parts seem, either im- 
mediately or ultimately, to make up the whole price of corn. . « 
In the price of flour or meal, we must add to the price of corn, the 
profits of the miller, and the wages of his servants ; in the price of 
bread, the profits of the baker, and the wages of his servants ; and 
in the prices of both, the labor of transporting the corn from the 
house of the farmer to that of the miller, and from that of the mil- 
ler to that of the baker, together with the profits of those who ad- 
vance the wages of the labor. The price of flax resolves itself 
into the same three parts as that of corn. In the price of linen 
we must add to this price the wages of the flax-dresser, of the 
spinner, of the weaver, of the bleacher, &c., together with the 
profits of their respective employers. As any particular com- 
modity comes to be more manufactured, tliat part of the price 
which resolves itself into wages and profit, comes to be greater in 
proportion to that which resolves itself into rent. In the progress 
of the manufacture, not only the number of the profits increase, but 
every subsequent profit is greater than the foregoing, because the 
capital from which it is derived must always be greater." 

The above analysis is sufficient to disclose the principle on 
which prices are composed, though it comprehends only a part of 
•those costs which enter into prices. It will be observed that rent 



A RESCUE FROM FOREIGN TAXATION. 387 

goes into prices; and the rental of England proper, for 1814-'15, 
according to M'C ulloch, was .£32,502,824, or about $156,000,000 ; 
the profits of the farmers in England, under the property-tax act, 
were rated at three fourths of the rent, which would be $126,- 
000,000; poor-rates of England proper, ^7,000,000, or $33,- 
000,000 ; church-rates, do., ^£9,000,000, or $43,000,000 ; annual 
parliamentary budget, £50,000,000, or $242,000,000 ; a great va- 
riety of municipal taxes, unknown ; profits of manufactures ; &c., 
&c. : all these, and many other nameless burdens of the English 
people, enter into and compose parts of the prices of their prod- 
ucts, whatever they are, and are paid by the consumers. 

As to the facts, that the systems of taxation of the different na- 
tions with which we trade, so far as the taxes enter into the prices 
of the articles to us, are unequal, that difference can not be of any 
account in the present argument, unless it can be shown that the 
aggregate of our imports is affected thereby as to the point now 
under consideration ; and even if it could, still the fact would be 
of very little account, and not worth noticing in the grand result. 
As the major part of our imports come from Europe, we have gen- 
erally taken society and the average price of labor there as a 
standard of our calculations ; and as labor is generally better paid 
in Europe, and as the systems of taxation are less oppressive there 
than in other parts from which our imports come, a more exact 
rule, derived from a consideration of such facts, would only give 
additional force to our argument. 

The result of the whole is, that the taxes of foreign governments 
or societies, from under whose jurisdiction we derive our imports, 
enter into the prices to us, and that we pay them, so far as we con- 
sume the articles, and do not re-export them ; and we have already 
given reasons to show why the respective amounts of taxation 
above given for each several year, from 1821 to 1845, as paid by 
us to foreign powers, by the consumption of their products, can 
not be very far from the truth. The question remains as to how 
we pay these taxes, and as to how far they are a burden ? 

To which it may be answered, first, that, so far as we import 
what we want, and what we could not, by protection or otherwise, 
ourselves produce, as cheap or cheaper ; and so far as we pay in 
our own products which we do not want, without being brought 
in debt, when the entire of our foreign trade is brought into the 
account, and are not forced to part with our cash to settle balances ; 
thus far it is of no consequence to us, in a commercial point of 



388 AN AMERICAN PROTECTIVE SYSTEM 

view, whether, in such a trade, we pay ten, or twenty, or a hun- 
dred millions of foreign taxes a year ; or whether we pay none at 
all, because no taxes exist in those quarters, if the case were so. 
The amount of foreign taxes, therefore, as specified above, which 
we really pay, more or less, is not so startling as, at first sight, 
might be supposed ; for it must have been observed, that the sums 
are very great. We may commiserate those conditions of society, 
as undoubtedly we do, or ought to do, where labor is forced to 
toil on and drag out a miserable existence, on wages which will 
only procure the scantiest necessaries of life, and three fourths of 
the price of those necessaries being itself made up of taxes ; we 
nsay be deeply sensible of the injustice and wickedness of such a 
state of society ; nevertheless, in a commercial point of view, it 
makes no difference with us at whose expense or at whose benefit 
we obtain the supply of our wants, by an exchange which is not 
only agreeable, but perhaps in some degree profitable. It matters 
not whether the prices are partly composed of foreign taxes or not, 
though, in the exchange, we pay those taxes, so long as they are 
not taxes to us. The operation, so far as we are concerned, might 
be precisely the same, if society, from under whose jurisdiction we 
derive our imports, were composed in the best and most equitable 
manner, if labor enjoyed its fair reward, and if there were no un- 
just system of taxation there ; provided, however, it be also sup- 
posed that this unjust society should not or could not take advan- 
tage of the parties with which it trades — a thing hardly to be 
expected. — It can and does charge exorbitant prices, wherever it 
enjoys a monopoly of the market. We are, of course, obliged to 
submit to these prices, so long as we can not ourselves produce 
the same things ; yet the trade, under all the unjust exactions, may 
be desirable, and even profitable. 

But, secondly, these foreign taxes begin to affect us as soon, 
and so far as, by a system of protection, we can not only produce 
the same things, but produce them at lower rates, if, for want of 
protection, we are obliged to depend on the supply of these wants 
from abroad. It has been proved that protection cheapens manu- 
factured articles. But even if it did not, and only afforded them 
at the same rates, still we should be unnecessarily subject to this 
enormous system of foreign taxation, the whole of which would be 
so much loss to the country. For example, the secretary of the 
treasury estimated, in his project for the tariff of 1846, that, by a 
reduction of duties to the rates he proposed, there would be an 



A RESCUE FROM FOREIGN TAXATION. 389 

additional revenue, on the imports of boots and shoes, of $45,000 ; 
on ready-made clothing, $200,000 ; on the work of blacksmiths, 
$200,000; on hats, $110,000; on leather, $100,000; on iron, 
$1,185,000 ; on coal, $5,150,000 ; on glass ware, $100,000 ; on 
paper, $150,000 ; on hemp, cordage, &c., $250,000 ; on pins, 
$50,000 ; on woollen fabrics, $2,000,000 ; on salt, $1,000,000 ; 
on sugar, $630,000; on wool, $200,000; on potatoes, $150,000 ; 
&c., &c. — The sum of the above items is $11,545,000, proposed 
to be raised by an average duty of 27 per cent, ad valorem, which 
would require a basis of more than forty millions of imports. With 
the exception of the blacksmiths' work, the amount of imports of 
the same articles, under the tariff of 1842, according to the report 
of the secretary, was a litde over $24,000,000, under an average 
duty of 59 per cent. Consequently, to raise an equal amount of 
revenue from these articles, with an average duty of 27 per cent., 
the imports must be doubled; so that the augmentation of imports 
of these fifteen or sixteen articles, which would be required to re- 
alize the secretary's project for the tariff of 1846 — not to speak of 
the remainder of the list subject to a like rule and rate of duty — 
is from sixty to seventy millions of dollars. Consequently, as the 
tariff of 1846 was not based upon the increased wants of the coun- 
try, but upon the transfer of production from the United Slates to 
foreign parts, it follows, that, to be realized, there must be a check 
of production at home by an amount equal to the augmentation of 
imports from abroad ; that is, a suppression of home production of 
from sixty to seventy millions of dollars. It is not a question 
whether we are capable of producing all and each of these articles, 
under a system of protection ; for we were in the habit of produ- 
cing them under the tariff of 1842 : nor whether we can produce 
them as cheap ; for that also is decided in the affirmative. It there- 
fore follows, that, by transferring the production of sixty or seventy 
millions of dollars' supply of our wants from home to other coun- 
tries, we not only injure our own people by depriving them of this 
amount of business, but we subject ourselves to a system of foreign 
taxation fbr at least three fourths of this amount ; that is, for some 
forty to fifty millions of dollars. It is in such a case, when we can 
produce what we want — much more when we have been in the 
habit of producing it — that we begin to feel, can not avoid feeling, 
the pressure, the overpowering weight of this foreign taxation. It 
is then that it becomes a positive, real, palpable tax, without di^ 
guise, and with all its irresistible effect. 



390 AN AMERICAN PROTECTIVE SYSTEM 

So long as we can not supply our own wants, and have where- 
withal to purchase, and do not buy beyond our means of paying, 
we are accommodated, at the same time that we pay these foreign 
taxes; for, in any case, we pay them for all we consume of foreign 
products. But in all that we are capable of supplying our own 
wants, under a system of protection, and yet, for lack of protection, 
are compelled to depend on foreign producers, nearly the whole 
amount of such expenditures is not only absorbed in systems of 
foreign taxation, but it is a positive tax to the country, while no 
party or person in it is-beneGted. Many, it may be thousands, or 
tens of thousands, are of course injured — deprived of their rights, 
and in a greater or less degree impoverished — inevitably incurring 
a negative loss, by not being able to acquire what they otherwise 
could, and are entitled to. 

But we have not even yet arrived at the points of this argument 
which are of the greatest force, and which are most strikingly illus- 
trative of the great truth which we are now endeavoring to make 
apparent. None, it is believed, can fail to appreciate the demon- 
stration — for such is the cl^aracter of the proof — presented in the 
above examination of the secretary's project for the tariff of 1S46. 
It can net but be seen that the plan there laid out for increased 
importations is not only identical wath a scheme of foreign taxation, 
to a very great amount, even for twenty millions of people, but that 
it is, at the same time, a plan for the suppression of so much Amer- 
ican industry and labor, which is an aggravation of the case. But, 
in order to have a more full appreciation of the natural and neces- 
sary results of this plan, it will be useful to recur to our history of 
imports and exports from the earliest date, as well as to the evi- 
dence displayed in \he foregoing statements of the foreign taxes 
which this country paid from 1821 to 1845; though it is admitted 
that they were not all necessarily, or of course, a burden ; and 
that, for a portion of that period, and for a part of this amount 
through the whole, they were an accommodation ; that is, so far as 
the imports supplied wants which we could not ourselves supply, 
and so far as we were protected against excessive importations 
w^iich we were not able to pay for, and the burden of which broke 
down the country. 

The history of our imports and exports, as furnished by the pub- 
lic (treasury) documents, does not go farther back than 1791, which 
is sufficient, and is very instructive on this point — instructive in 
itself, in the contrast of its columns of imports and exports, and in 



A RESCUE FROM FOREIGN TAXATION. 391 

its exhibition of the fluctuations of excess, one over the other; and 
still more instructive as compared with the history of British im- 
ports and exports. It appears from Anderson's Commercial His- 
tory of Great Britain, that from 1700 to 1787, there was not a 
single year when the exports did not exceed the imports ; and that 
the aggregate excess or balance of exports over imports, for this 
period, was .£289,321,713 ; or $1,400,317,090. Since 1787, the 
balance has also been uniformly on the side of exports, but greatly 
in excess of the former period, and that excess constantly augment- 
ing. In a report of the American Institute, New York, 1844, on 
*' the commercial intercourse of the United States and Great Brit- 
ain," they say : — 

" The total value of exports and imports of Great Britain and 
Ireland for three successive years was as follows : — 

Year. Exports, Imports. 

1839 £110,198,716 £62,004,000 

1840 116,479,679 67,432,964 

1841 , 116,903,668 64,377,962 



X343,582,06l £193,814,926 

Balance in favor of Great Britain, ^149,767,136, or an annual 
average of £49,822,378, equal to $237,227,414." This statement 
is manifesdy too large, arising, probably, by taking the valuation 
established in 1694, instead of finding the " declared value." 

We find in M. Say the following passage on this point: " The 
returns of British commerce, from the commencement of the eigh- 
teenth century down to the establishment of the existing paper- 
money of that nation [the bank-of-England suspension, in 1797], 
show a regular annual excess, more or less, received by Great 
Britain, in the shape of specie, amounting altogether to the enor- 
mous total of ^347,000,000 sterling." 

The commercial history of the United States, as appears from 
our public (treasury) documents, is a remarkable contrast even to 
Anderson's tables. From 1791 to 1845, inclusive, there was an 
excess of exports over imports only for eleven years of this period, 
the aggregate of which was $79,545,660 ; whereas, the aggregate 
excess of imports over exports, for the other forty-four years, was 
$798,505,146 ; making an aggregate balance of imports over ex- 
ports, for the whole fifty-five years, of $718,959,486. 

It is not less instructive to observe when and from what apparent 
causes the balances in favor of the country have occurred; small as 
they are, compared with the other side. The first favorable balance 



392 AN AMERICAN PROTECTIVE SYSTEM 

we find, is one of a little less than eight millions, in 1811, the year 
before the war. It was after a protracted period of unfavorable bal- 
ances, running back to 1791, the first year of any official statements 
on the subject ; of course running back into the years of the con- 
federation, worse yet; and into the colonial history, the worst of 
all. For the six years immediately preceding 1811, the amount 
of balance against the country was upward of $140,000,000. The 
country at this time was, therefore, much exhausted, poor, without 
credit, and the small excess of exports over imports, in 1811, was 
the natural result of the obligation, and of an effort, to make remit- 
tances for foreign demands. The next (second) excess of exports 
over imports was a Htlle less than $6,000,000, in 1813, in the 
midst of the war, when our imports were only twenty-two millions, 
reduced in 1814 to thirteen millions. The m.ajor part of our com- 
merce, as may be supposed, was then carried on in neutral bottoms; 
and the excess of exports in 1813 was more than counterbalanced 
in 1814, when the exports were only seven millions against thir- 
teen millions of imports. After a lapse of seven years from this 
time — years of an immense excess of imports, amounting in the 
aggregate to upward of $190,000,000 — there was another small 
excess of exports in 1821, a little in excess of two millions of dol- 
lars; another in 1825, of three millions; another in 1827, a little 
less than three millions ; and another in 1830, also less than three 
millions. These, of course, were but of small amount against the 
large excess of imports running along the same period of about ten 
years. From 1830 to 1840, the aggregate excess of imports over 
exports, was $224,000,000, which had so much impoverished the 
country, and run it so much in debt, that it had no credit abroad 
to buy with. As a natural consequence, the exports in 1840 pre- 
sent a larger excess over imports, than in any other year of our 
history, being a little less than $25,000,000, half of which, at least, 
was required to pay interest on foreign debts, contracted in the nine 
previous years. In 1841, there was another excess of imports, 
$6,000,000. But from that time, under the tariff of 1842, till it 
was repealed in 1846, the balances were all, and uninterruptedly, 
in favor of the country, amounting, for the years 1842 to 1845, in- 
clusive, to upward of $29,000,000. 

The heaviest balances of imports against the country, are found, 
either at a period of the disturbance of our foreign relations, or at 
periods of low duties. The first heavy balance of $32,000,000, 
was in 1791, before the country was fairly rescued, by the opera- 



A RESCUE FROM FOREIGN TAXATION. 393 

tion of the new constitution, IVom the Free-Trade period of the 
confederation. During the disturbance -of our foreign relations, 
from 1804 to 1812, the year that war was declared, there were also 
some heavy balances against us : In 1805, $24,000,000 ; in 1806, 
$27,000,000 ; in 1807, $29,000,000 ; in 1808, $34,000,000 ; in 
1810, $18,000,000 ; and in 1812, $38,000,000. The first two 
years after the peace, the balances against us, for want of adequate 
protection, were very great : In 1815, $60,000,000 ; and in 1816, 
$65,000,000. Though much abated, the next three years brought 
an aggregate balance against us, of upward of $50,000,000. From 
that time, the balances against us, were comparatively light, and 
some years in our favor, as above noticed, till the protective system 
was disturbed and impaired, in 1833, when the balances against us 
began again, and soon rose to a fearful and ruinous amount: In 
1833, it was 18,000,000 ; in 1834, $22,000,000 ; in 1835, $28,- 
000,000; in 1836, $61,000,000; in 1837, $23,000,000; in 1838, 
$5,000,000; and in 1839, $41,000,000; making an aggregate 
balance against us, in seven consecutive years, without interruption 
or relief, of $198,000,000. 

According to the premises before laid down, three fourths at 
least of this aggregate balance against us, that is, $148,500,000, 
was a positive tax on the people of the United States, for the sup- 
port of foreign powers, and for the impoverishment of this country, 
all paid, drawn from us, in seven years, or consolidated into foreign 
debts, to be paid thereafter, with interest. The whole of it, in- 
deed, was a tax on the country, and much more, all of which an 
adequate protective system might and should have barred. It was 
in our power, under a well-adjusted and well-sustained protective 
policy, to have supplied from among ourselves, all this excess of 
imports over exports — or all that was wanted, for we then really 
imported much more than was wanted, in the prodigality of waste- 
fulness ; and we could have suppHed it at lower rates, and in better 
articles. When the breaking down of the protective system, ef- 
fected by the policy of that period, and all its disastrous, ruinous 
consequences to the industry, labor, and capital of the country, are 
considered, this loss of $198,000,000, does not by any means meas- 
ure the injury done to the country. It is enough, however, for our 
present argument, that the people of the United States actually paid 
the taxes imposed by foreign governments, in one form and another, 
on the products purchased with this $198,000,000, amounting to 
not less than $148,000,000, without a single penny's worth of 



S94 AN AMERICAN PROTECTIVE SYSTEM 

equivalent; with great additional loss, indeed, in the general put- 
back of the country, as to the use and application of its capital and 
labor. And they paid this tax to foreign powers in seven years, or 
became indebted for it, and paid afterward, and are still paying — 
for it is not all paid even yet. And yet all these goods might have 
been produced at home, cheaper and better ; and all the American 
labor and capital that should have produced them, were deprived 
of so much employment, and suffered for want of it — were them- 
selves compelled to buy these very things, and pay for them, send- 
ing their money abroad, instead of using it at home to increase 
their own and the public wealth. Was it not a tax ? 

Nor is this the end of the reckoning. It is a pity, indeed, that 
we have no colonial commercial records, of an official character, 
to instruct us on this point ; for those must have been disastrous 
times, which so exasperated the people, and at last goaded them 
on to rebellion. And it is worthy of note here, that they were 
troubles, hardships, oppressions of this very kind — -originating 
from this sole cause, to wit, by forcing the colonists to purchase 
their articles of manufacture from the mother-country, and thus to 
pay her taxes. It is a pity, too, that we have no official records 
of the commercial history of the states under the confederation^ 
which would be full of instruction on the subject now under con- 
sideration. By such means, we should be able to show, in figures, 
how the money and the wealth of the colonies, and afterward of 
the states, before the constitution was adopted, were drawn from 
the country, for want of Protection, to enrich foreign parts, and 
strengthen foreign powers. But we can only begin with 1791, from 
which date, down to 1845, a showing has already been made, from 
public documents, of the commercial balances of the country, in its 
trade with foreign parts. A glance has been taken at the commer- 
cial history of Great Britain, in the same aspects, beginning with 
the year 1700. It has been seen what that is, and what a contrast 
is presented in the commercial history of the United States : The 
former always drawing in balances in her favor, from the wide 
world, never failing, and for ever increasing in amount ; while the 
United States is almost always losing — almost always making 
sacrifices. From 1791 to 1845, inclusive, the aggregate balance 
against this country, resulting from its foreign trade, as certified by 
public official records, is $718,959,486. Three fourths of this at . 
least, as already shown, or $539,236,604, was a tax on the people 
of this country, which they have been forced to pay to foreign pow- 



A RESCUE FROM FOREIGN TAXATION. 395 

ers, in a little more than half a century, not only without the slightest 
equivalent, but with a positive detriment to their interests, not less 
than the other quarter — probably much more. By an examination 
of the commercial history of the country, as displayed by the offi- 
cial records, all its parts harmonize with the doctrine which guides 
us to these results. Whenever the protective policy has prevailed, 
by the necessities of war, or by legislation in peace, the balances 
of imports against the country are reduced, and occasionally turn 
the other way. Under the effects of the tariff of 1842, as long as 
it lasted, the balances were all in favor of the country. But when- 
ever duties have been reduced, and Protection diminished, the ex- 
cess and the increase of the excess of imports over exports, has 
followed as regularly and as certainly as night follows day ; and 
the temperature of the weather is not measured more accurately by 
the thermometer, than the losses and gains of the country, in its 
foreign trade, by the depression and rise of import duties, as they 
relate to the principle and objects of Protection. Mathematical 
verities were never established with greater certainty than this propo- 
sition ; for it is itself determined by figures, which can not err, when 
legitimately and fairly applied. 

The following facts, as will be seen, are but another way of 
coming to the same result, in the use of a part of the same prem- 
ises employed above : It appears from a report of the Hon. J. P. 
Kennedy, of the 27th Congress, from the committee on commerce, 
that, from 1820 to 1830, the aggregate imports of the United 
States amounted to $798,500,000, and the amount retained for do- 
mestic consumption to $568,900,000; and that, from 1830 to 
1840, the imports were $1,302,500,000, and the amount retained 
for domestic consumption was $1,103,100,000. It is worthy of 
remark here, that, as the effect of the protective policy established 
in 1824, and continued for a number of years, the nation paid off 
a debt of one hundred millions ; and that, chiefly in the last half 
of the period from 1830 to 1840, when the low rates of duties un- 
der the Compromise act of 1833 were in operation, a foreign debt 
of two hundred millions was contracted. It is accounted for in 
the above-cited imports and consumptions of that period. About 
one hundred millions of the state debts were contracted in 1835 
and 1836, and nearly all of them got into the foreign market about 
this time to settle balances for excessive importations. 

One can hardly fail to see, by these facts, that when we are ac- 
commodated by exchange of products with articles not convenient 



396 AN AMERICAN PROTECTIVE SYSTEM 

for US to produce, and so long as it is inconvenient, or more profit- 
able to obtain them by such exchanges, we are compelled to pay- 
higher for them than we ought to pay, because the producers of 
such articles have a monopoly of our market, and will have their 
own prices ; which is the cause of their reduction under an Amer- 
ican protective system. Consequently, even in that case, though 
it is on the whole a desirable exchange, we are burdened, in no 
inconsiderable degree, with foreign taxes. Secondly, that it is 
desirable, that it is sound policy, and a duty which we owe to the 
labor, capital, enterprise, and weal of the country, to rescue our- 
selves even from this taxation, as soon as we are prepared ; and we 
are prepared whenever capital is ready to employ labor for this pur- 
pose, and when it asks protection to begin the work. We can almost 
universally in the outset, in the end always, produce the same arti- 
cles cheaper, when we can produce them at all, as proved in tho 
preceding chapter. The country is of course benefited, and con- 
sumers may also be benefited, as elsewhere shown, even when such 
protected articles are a little higher for a season. They can not 
be long higher, and in the end will be cheapened by domestic com- 
petition. But, thirdly, whenever by the reduction or abolition of 
protective duties, or by refusing to establish them when capital so- 
licits it, American producers are so weakened in a competition with 
foreign producers, that the latter have the advantage, and are able 
to force into our market such large quantities of their products, as 
to turn the balance of trade against the country, as above proved 
to have been often done in the progress of our commercial history, 
then the tax on the country, imposed by foreign powers and foreign 
factors, is positive, and not less in amount than three fourths of 
the value of the excess of imports over exports ; and not only so, 
but the tax is imposed on the industry, labor, and capital of the 
country in its crippled condition, so that being obliged to pay it 
under such circumstances, doubles, or trebles, or quadruples the 
burden. If they could have the business and profit of which they 
are deprived by this want of protection, they could pay this foreign 
tax, great and heavy as it is, in the shape of a direct and naked 
bounty, with infinitely more ease than they can sustain it when 
thus imposed. And what would be thought of such a bounty, 
imposed upon this country, in the full tide of its prosperity, under 
an adequate protective system ? It could then be endured, if it 
were not understood how it came ; whereas, the taxes paid by the 
people of the United Slates to the foreign world, in the prevalence 



I 



A RESCUE FROM FOREIGN TAXATION. 397 

of Free-Trade principles, by the breaking down of Protection, 
can not be endured. The country always breaks down under it; 
and we see by the argument of this chapter why it could not be 
otherwise. 

We are aware that Free Trade will, perhaps, reply to the argu- 
ment of this chapter, that this immense system of foreign taxation, 
entering into the prices of all foreign products, is itself a protective 
system. Our commercial history, however, demonstrates that it is 
inadequate ; and we have elsewhere shown that inadequate protec- 
tion is no protection. If the usurpation of the rights of labor in 
those foreign quarters be assumed to be equal to the fair reward 
of labor in the United States — reward being viewed in the light 
of compensation, over and above subsistence — then the productive 
power of the foreign world is a balance of our own, with this ex- 
ception, that we can not afford to sacrifice our rights in a com- 
mercial strife, under Free Trade, with a power two thirds or 
three fourths of which is usurped, and which consequently gives it 
an immense margin of strength to spare on the points of strife be- 
tween us as parties. All that is our own, is necessary to us ; 
whereas, any part of this foreign usurpation may be relinquished 
for a season, to deprive us of our rights. It is for this reason that 
we require protection. All the costs of imports which are com- 
posed of foreign taxation, constitute the rewards of our various 
branches of industry, when, under a system of protection, we 
produce the same things ourselves ; and it is only by protection 
that we are able to produce them. 



398 GAINS OF PROTECTION 

CHAPTER XXV. 

GAINS OF PROTECTION AND LOSSES BY FREE TRADE. 

The everlasting Objection.— The Charm of Hypothesis, as compared with the Inductive 
Mode of Reasoning. — ^How things look at a Distance. — Supplication of Europe to 
America.— St. George's Spear in the Throat of the Dragon— The aggregate Loss to the 
United States, since 1791, for Want of a Protective System.— The Loss comprehends 
the Use of the Capital in all Time. — The Effects of new Arts and new Pursuits under 
a Protective System. — A variety of Facts on this Point. 

It is well known that the only objection to protective duties 
ever urged, has been the assumption — proved in the foregoing 
pages to be false and groundless— that they are taxes, and taxes 
to the full anniount of the duties which are imposed on the 
protected articles. There never was an argument made against 
Protection which did not assume this, or which alleged any 
other objection that did not resolve itself into this. The Free- 
Trade argument is universally constructed on the principle of an 
hypothesis. It is singular that a matter-of-fact age, which has long 
since loaned its almost unqualified sanction to the inductive mode 
of reasoning, that is, reasoning and forming conclusions from facts, 
should have yielded so much to this strange delusion, and that 
whole states and nations should have almost gone mad with it. It 
demonstrates the sluggishness of the human mind in reducing to 
practice its own professed faith, and its propensity to romance in 
the affairs of life, rather than dig among facts, and search them out 
for doctrine and use. Of all modes of reasoning, theorizing, with- 
out a basis, is most captivating to the intellectual sluggard. He is 
neither obliged to find, nor disposed to consider, facts. If they 
come in his way, he always has a theory to oppose to them, and if 
they do not accord with his preconceived opinions, they are inad- 
missible. He worships theory built on hypothesis. Did it not, 
he asks, teach us how the universe is kept in order, by the principle 
of gravitation? But he forgets that the fact of the falling of an 
apple led to this discovery ; nor does he seem to be aware that 
there is no conclusion in the theory of the heavenly bodies, which 
is not deduced from ascertained facts. Of all sciences, if this de- 
serves the name of one, public economy, to be safe and useful, 
claims, more, if possible, than any other, to be based on facts ; all 



AND LOSSES BY FREE TRADE. 399 

its deductions should be founded on facts, and facts alone ; and any 
theory, passing under this name, which has not such a basis, is 
worthy of no respect. Free Trade is this baseless theory, with 
the facts of all history and the experience of all mankind against it. 

A single sentence from the London Times of January 1, 1847, 
uttered after it had copiously poured the unction of its flattery on 
the heads of the American president and his secretary of the treas- 
ury, for their able vindication of the principles of Free Trade, 
will illustrate the relative position of this country to foreign parts, 
in a commercial point of view, better, perhaps, than anything else : 
"Almost every nation in the world," says that journal, " is directly 
interested in the degree of liberality and friendliness with which 
the United States rnay open their resources to the wants of other 
more-crowded and less-favored realms." This is supplication, 
entreaty — for what? To allow Europe to live at our expense. 
An appeal is made to our "liberality," "friendliness." We are 
implored to be charitable. This only to show the importance that 
is attached to the controversy. It bodes a great strife when the 
United States undertake to protect their own interests — to defend 
their own rights. Europe is convulsed. " Almost every nation 
in the world," says the London Times, "is directly interested." 
A plainer truth was never uttered. The European world observes 
that labor has gained an independent position in the United States; 
and it sees, that, if that position be maintained, by protecting itself, 
all other nations must be revolutionized. Either American labor 
or foreign despotisms must fall. The instincts of unjust power 
cause it to quake On its precarious throne, and what sacrifices will 
it not make to defend its unrighteous supremacy, and absurd pre- 
tensions ? If, in apprehension of evil to itself, it will stoop to sup- 
plication, to entreaty, by all the ties of a pretended brotherhood, it 
is not because it will not put on different airs, when once it may 
have recovered its position, and is exempt from such fears. Such 
symptoms demonstrate a conscious weakness, not of misfortune, 
but of crime — the crime of doing wrong to humanity, by depri- 
ving it of its rights. 

All we intended by drawing aside the curtain to exhibit this 
spectacle, or rather by employing the hand of the culprit behind, to 
lift the screen that hides his own shame, was to show what potent 
principles of self-preservation are invoked, on the side of European 
powers, when once they see that American labor is rising to pro- 
tect itself; how they will crouch to supplication, and how they 



400 GAINS OF PROTECTION 

will yield anything for a season in the prices of their own products, 
if they can have a chance of raising them thereafter, or if they can 
only preserve their markets at smaller profits. It is this great hat- 
tie which reduces the prices of manufactured articles in the United 
States, under a protective system ; and this is one of its benefits. 
It reduces them generally, particularly and essentially, as evinced 
by an exhibition of facts, in a former chapter — reduces them so 
much, that the whole country, and every party and person in it, 
are sensible of the benefit, the theory of Free Trade to the con- 
trary notwithstanding. 

As to the fact that a protective system rescues us from an enor- 
mous amount of foreign taxation, it is undoubtedly the greatest and 
most important one that can be named. It is the real remedy — 
the effective and commanding influence. It is St. George's spear 
in the throat of the dragon. This country has yet to learn how 
it is taxed, and how it has ever been taxed, to support the Euro- 
pean system of society. It will hereafter be a subject of astonish- 
ment, that this momentous element of public economy for the 
United States, was not more fully developed, and brought to bear 
upon the public mind, at an earlier date. Certainly, this has not 
been a defect in the instincts of the people, but only in the rulers, 
politicians, and statesmen of the country. Did not the American 
fathers feel it before the great political rupture between themselves 
and the mother-country; and was it not the cause of that rupture? 

It was taxation, such as is described in the preceding chapter 
— taxation comprehensive, heavy, intolerable — taxation in the very 
mode now under consideration, by forbidding American manufac- 
tures, and forcing the colonists to supply their wants of this kind 
through British merchants ; it was such a system of taxation, which 
brought about the American revolution, and resulted in the estab- 
lishment of American independence. 

Nor was the country relieved very essentially from this system 
of foreign taxation by the establishment of independence, till nearly 
half a century had elapsed. From the peace of 1783 to the adop- 
tion of the constitution in 1789, the confederated states were under 
a system of perfect Free Trade, and Great Britain and Europe 
drew away the money and wealth of the country as effectually as 
before the war of the revolution. We learn from Pitkin's Statis- 
tical View, that our imports from Great Britain, for the first year 
after the peace of '83, were six to one of our exports to that em- 
pire ; and that the annual average proportion of our imports from, 



AND LOSSES BY FREE TRADE. 401 

over our exports to, Great Britain, from 1783 to 1790, was as 
three of the former to one of the latter. Hence we find, by the 
treasury documents, which give us no light beyond that year, that 
the excess of our imports over exports, in 1791, was $32,000,000. 
Nor did this country ever enjoy an effective protective system till 
the enactment of the tariff of 1824» Accordingly, we are not sur- 
,prised — however much we may be mortified — to read from Lowe, 
as cited by Mr. Clay, in one of his speeches, that "it is now above 
forty years since the United States of America were definitively 
separated from us ; and since [that time], their situation has afforded 
a proof, that the benefit of mercantile intercourse may be retained, 
in all its extent, without the care of governing, or the expense of 
defending, these once-regretted colonies." How was " the benefit 
of mercantile intercourse retained, in all its extent" ? Simply, for 
want of an adequate system of protection in the United States, 
down to that time. It was for this reason, that, according to this 
authority, and giving the true version of his language. Great Britain 
continued for nearly half a century, to tax the people of this coun- 
try as effectively as she did before the revolution, and in addition 
to this, was saved " the care and expense" of government. There 
is no other intelligible explanation of this remarkable statement. The 
American revolution and its results, according to Lowe, were at first 
regretted by British statesmen ; but it was afterward found, that 
they could still tax the United States as easily and as effectually as 
before, without exj^ense and without responsibility. Such is the 
teaching of Lowe, and it was undoubtedly true. Our foreign com- 
mercial history, as presented in the preceding chapter, from our own 
public documents, proves it. It is from this enormous system of 
foreign taxation that the protective policy rescues the country. 

It was on the basis of the principle which lies at the foundation of 
this system, that Henry, now Lord Brougham, said in the house of 
commons, as elsewhere cited, that " it was well worth while to stifle 
in the cradle the rising manufactures of the United States ;" and that 
another member said, very frankly, which is equally worthy of citing 
a second time, as here done : *' It was idle for us to endeavor to 
persuade other nations to join with us in adopting the principles of 
what was called Free Trade. Other nations knew, as well as the 
noble lord opposite, and those who acted with him, what we meant 
by Free Trade was nothing more nor less than, by means of the 
great advantages we enjoyed, to get a monopoly of all their mar- 
kets for our manufactures, and to prevent them, one and all, from 
26 



402 GAINS OF PROTECTION 

ever becoming manufacturing nations. When the system of 
reciprocity and Free-Trade had been proposed to a French am- 
bassador, his remark was, that the plan was excellent in theory, but 
to make it fair in practice, it would be necessary to defer the at- 
tempt to put it in execution for half a century, until France should 
be on the same footing with Great Britain, in marine, in manufac- 
tures, in capital, and the many other peculiar advantages which it 
now enjoyed." 

The Edinburgh Review, in speaking of the reduction of duties by 
the Compromise act of 1833, said : " We have no doubt that it has 
given the death-blow to the American system."* The London 
Spectator, in 1833, said : *' More general considerations tend to 
show, that the trade between the two countries [the United States 
and Great Britain] most beneficial to both, must be what is com- 
monly called a ' colonial trade,' the new-settled country importing 
the manufactures of the old, in exchange for its own raw produce. 
In all economical relations, the United States still stand to Eng- 
land in the relation of colony to mother-country." 

These citations, certainly, may be regarded as sufficiently intel 
ligible, and quite to the point aimed at. They are not ignorant of 
the nature and results of the colonial relation between themselves 
and the United States, and may well be excused for advocating 
that state of things which is tantamount, the benefits of which are 
all theirs, and all the disadvantages ours. 

The saving and increase of national capital effected by a protec- 
tive system, as before shown, are considerations of no mean impor- 
tance. Take, for example, the aggregate balance of imports over 
exports, from 1791 to 1845, inclusive, fifty-five years, namely, 
$718,959,486, as exhibited in the preceding chapter; or in round 
numbers, $719,000,000 ; all which might and should have been 
saved to the country by a protective system. Add to this an av- 
erage gain of seven millions a year, in the excess of exports over 

• The merits of the Compromise act, as the best possible measure for the time 
and circumstances, to rescue the American manufactures from the mortal blow then 
aimed at them by the administration, through Mr. Verplanck's bill, at that mo- 
ment pendinsr, and certain to become a law, except as the Compromise headed and 
subverted the plan, are not at all disparaged by this very natural remark of 
a foreigner. The plan of the Compromise act was to save the manufactures 
then from the doom pronounced, and to give time for reflection and for a re-edifi- 
cation of the American manufacturing system. That the Compromise ran out, and 
the duties and revenue ran down, was no fault of the plan, but the misfortune of 
the country to have remained so long in such hands. At last, however, the tariff of 
1842 came to the rescue, a tardy, but exact fulfilment of the plan of the Compromise. 



AND LOSSES BY FREE TRADE. 403 

imports for this period, which was the average under the tariff of 
1842, and which would fall much short of a reasonable gain for 
the United States in its foreign trade, as compared with the gains 
of Great Britain, before shown (the average of which, from 1700 
to 1787, was upward of sixteen millions of dollars a year, rapidly 
increasing from this last date) ; and with this addition of seven 
millions a year, for fifty-five years, the sum of our minus quantity 
for this period, as compared with what we were justly entitled to, 
will be $1,104,000,000. This, it will be observed, does not in- 
clude the losses we sustained under the confederation, which were 
greatly in excess of any time since ; but wanting authentic docu- 
ments, they can not be reckoned, and we are confined, in this cal- 
culation, within the limit of 1791. Here, then, is a positive loss 
to the country, in fifty-five years, of $1,104,000,000, a principal 
sum, without reckoning the interest on it as capital — all for want 
of a protective system. Consider, then, that an adequate protective 
system in existence all this while, after having saved this capital of 
$1,104,000,000 to the country, as it was due and lost from time to 
time in parts, would have put it to use, so as to have produced at 
least the usual rate of interest, six per cent. 

In running the eye over the tables, any one will see that, if we 
reckon the interest of the entire sum for one third of this period of 
fifty-five years, it will without doubt be less than the result that 
would be obtained from an accurate calculation on each sum from 
the time it became due, or was lost, to 1845. Or, instead of one 
third, say seventeen years, which is the nearest integral number at 
which interest at six per cent, doubles the principal sum. By this 
rule, the actual loss to the country, as will be seen, for want of an ad- 
equate protective system, from 1791 to 1845, was $2,208,000,000. 
The principal sum of $1,104,000,000, was a loss of so much mon- 
ey ; and the proof that six per cent, is not too high a rate of inter- 
est, is found in the facts, first, that it is the lowest rate which has 
usually been paid in this country ; and next, that more than that 
could be made in the use of it, or it never would or could be paid. 
It would probably be nearer the truth to say, that, for the last fifty 
years, or even from the date of American independence, under a 
steady and adequate protective system, money, in the hands of the 
enterprising population of this country, would have been worth ten 
or twelve per cent. 

The elements of this calculation, as will be seen, are drawn from 
authentic documents ; and the reasoning, leading to the result, is 



404 GAINS OF PROTECTION AND LOSSES BY FREE TRADE. 

based on facts and principles, which, it is believed, can not be easily- 
disturbed. It may be surprising to those who have not reflected 
upon the subject ; but, it may be asked, in view of the premises, 
how can the result be otherwise? It will also be seen, that the 
reckoning does not stop at this point ; and that, to be fully appre- 
ciated, it must be carried on, from age to age, by the same rule, 
swelling and rolling up the national losses, or the alternative con- 
tingent accumulations of wealth, that belong to the subject, till the 
powers of calculation are literally burdened with the task. There 
is no remedy for the past. This $2,208,000,000, and all its con- 
tingent beneficial results, by being put and kept in use, doubling 
itself in every seventeen years, are lost for ever. The only remedy 
that can be applied, is for the future. 

But this calculation, based on the ordinary six per cent, for the 
use of money, does not by any means, nor by far, comprehend the 
case. The enterprise of the people of this country, under any tol- 
erable system of protection — take, for example, the seven years 
subsequent to the enactment of the tariff of 1824, and the shorter 
period of the influence of the tariff of 1842 — has never failed to do 
much better, on the average, with every species of capital, than an 
increase of six per cent. In the first place, the average interest of 
money has never been less than that, to which must be added the 
profits of tliose who could afford to pay such interest, two, five, ten, 
and sometimes fifteen or twenty per cent., to arrive at the true re- 
sult. In the next place — and by no means the least important 
item — the steady and firm rise in the value of every species of 
property, under a system of adequate protection, claims to come 
into this reckoning, and necessarily belongs to it. Land rises ; im- 
provements of every description, private and public, on a small or 
large scale, rise ; stocks rise ; farms in the vicinity of manufactu- 
ring villages and towns, rise ; and by the increase and multiplica- 
tion of these establishments, the influence extends over the whole 
country, to affect every farm and every farmer, every bit of prop- 
erty and every owner thereof, in the same way. The Hon. Mr. 
Ramsey, of Pennsylvania, stated on the floor of Congress, in 1846, 
that, since the enactment of the tariff of 1842, farms in Schuylkill 
county, in consequence of the encouragement given by Protection 
to the coal business, had doubled in value, and that farms in the 
adjoining counties, in proportion to their proximity to the mines 
and the business created by them, felt the same influence. So in 
the iron regions of Pennsylvania and elsewhere. So in the case 



BENEFITS OF NEW ARTS AND OF NEW PURSUITS. 405 

of all great and important articles, the home production of which 
has been encouraged by Protection. Every species of property 
around their centres of industry and activity, comprehending v^ride 
regions, and extending, more or less, to the farthest bounds of the 
Union, has risen in value. All the minor manufacturing establish- 
ments, and all the mechanic arts, in the aggregate, exert an im- 
mense influence of the same kind, under a system of Protection. 
Labor rises ; the products of agriculture rise ; everything rises, but 
the prices of the protected articles of manufacture, which are always 
reduced, under such a system, as before shown. It must be seen, 
therefore, that the usual rate of interest for money, scarcely begins 
to measure the increase of value in the capital of the country, as 
the result of a protective system. Consequently it will be seen, 
that the estimate above made of an aggregate loss to the country, of 
$2,208,000,000, from 1791 to 1845, for want of Protection, does 
not even approximate toward the reality. 

It must be obvious to every reflecting mind, that, whenever a 
new productive art, or a new productive pursuit, is started in the 
community, and sustained, it is a benefit to every other productive 
art and pursuit, directly or indirectly, proximately or remotely, be- 
cause it takes one or more persons — in some cases many, even 
thousands — from some other pursuit or pursuits, and constitutes 
them customers to other vocations, as consumers of their products, 
instead of being themselves producers of the things. which they 
now have occasion to consume. They give to those engaged in 
the pursuits which they left, or would otherwise have been engaged 
in themselves, more and a better business ; these latter, in conse- 
quence, become better customers to others ; and these others to 
others still, until the entire round of the productive arts, and the 
productive and useful pursuits of life, is reached and benefited by 
additional demands on the industry of all. Besides this, every 
new art or pursuit, the products of which are essential and impor- 
tant to the community, almost necessarily calls into existence other 
new arts and pursuits, to supply its demands ; and these latter, the 
offspring of the former, themselves become parents of other arts 
and pursuits, in their turn ; and so on, in almost endless progres- 
sion. It diversifies labor, and makes every species more valuable 
to itself, because it has less competition, and there is more demand 
for it. Nor is it to be forgotten, that evety product of every new 
art or pursuit, and the effect of every new application of skill and 
labor, is a new and substantial element of the commonwealth. 



406 BENEFITS OF NEW ARTS AND OF NEW PURSUITS. 

which did not exist before, diiFusing its benefits all around. It is 
so much addition to the common stock of valuables — to the gen- 
eral, to national wealth. It is no answer to this, to say, that these 
several or many parties could or would have done as much in old 
arts and pursuits ; for those engaged in the old will always pro- 
duce as much as the wants of the community require. The effect 
of the multiplication of productive arts and pursuits under a pro- 
tective system, is to make all arts and pursuits, old and new, more 
active, and more profitable to the parties, as well as more produc- 
tive of national wealth.* Suppose these new arts and new call- 
ings, each occupying a like position of importance in its relations, 
are multiplied indefinitely in a great community — that they go on 
in endless progression of increase as to number — and that each 
becomes a nucleus of indefinite, ceaseless aggregation. Their 
power of augmenting national wealth, then, becomes equally indefi- 
nite, boundless, interminable, immeasurable. 

The new arts and new callings that have grown up in the Uni- 
ted States, under the protective policy, can scarcely be counted, 
and the growth of some of them has become gigantic in their in- 
terests, and in the ramifications of their influence on other pre- 
existing interests, to put them forward with equal strides, and to 
raise them to a corresponding importance. 

It has bgen ascertained and well certified, that the Glenham 
woollen factory, at Fishkill, New York, with a capital of $140,000, 
gives profitable employment to $1,422,000 worth of other Ameri- 
can capital, chiefly agricultural, in items as follows : 66,000 sheep, 
$2 a head, $132,000 ; 22,000 acres of pasture land, to feed the 
sheep, supposed to be worth in that county, $50 an acre, 
$1,100,000 ; farms employed to the extent of 2,600 acres, worth 
$70 an acre, $182,000 ; other capital, to furnish teazles, firewood, 
coal, provender, &c., &c., $8,000. Total, $1,422,000. To this 
should be added the sum of the wages paid to the operatives and 
agents of the factory, which would considerably increase the 
amount of capital employed. Nor is this the end of the calcula- 
tion. All the persons employed in and about this establishment, 

* The manufacture of gold pens is a remarkable instance of the introduction and 
growth of a new art. It is not ten years since they were first made, and it is es- 
timated that one million a year are now manufactured in New York, using up 800 
pounds' weight of gold. The reduction of price by competition is no less remark- 
able. They were at first sold for $5, and may now be had for $1 50 cts. and $1. 
A single manufacturer employs in this business a capital of $80,000, and expends 
$1,000 a we'ek for labor. 



BENEFITS OF NEW ARTS AND OF NEW PURSUITS. 407 

all employed to tend the sheep and cultivate the farms, to furnish 
teazles, fuel, and provender, and to supply any and all other de- 
mands, are withdrawn from other pursuits, to afford them a better 
chance of profit, and become customers to a variety of callings, 
and to a great extent, where they would otherwise have been them- 
selves employed. 

The city of Lowell, Mass., is the sole creation of the protective 
policy. In 1821, the ground on which it stands was used for or- 
dinary agricultural purposes, and was then bought by the Merri^ 
mack company. In 1S45 it had a population of 30,000, of which 
nearly one third were operatives in the mills, consisting of 6,320 
females, and 2,915 males. The capital invested in manufacturing 
and mechanical enterprises, was $12,000,000. The annual con- 
sumption of cotton, 61,100 bales; (wool not given, but great;) 
of coal, 12,500 tons; of wood, 3,270 cords; of oil, 67,842 gal- 
lons ; of charcoal, 600,000 bushels ; of starch, 800,000 pounds. 
Of course, these are only the leading and principal articles of con- 
sumption. More than a million and a half of dollars a year are 
paid for labor, and the profits are about the same. 

Here, then, are 30,000 persons withdrawn from other occupa- 
tions of the country by means of these establishments, and concen- 
trated on this single point, all living by them, and giving so much 
better chances for those occupying the places which they would 
otherwise have filled, both parties becoming customers of each 
other, directly or indirectly. To this population must be added 
that employed to" supply the raw cotton, the wool, the coal, the 
wood, the oil, the starch, the food and clothing for 30,000 persons, 
the building materials, the erection of the buildings, the furnishing 
of the houses, and the thousand articles of consumption that can 
not be named. If it be supposed that the capital of $12,000,000 
invested at Lowell employs other capital of the country, in propor- 
tion to that invested at Fishkill, New York, as above noticed, that 
other capital thus employed would amount to $121,885,714. Nor 
does the vast benefit to other pursuits of the country, in preventing 
over-production, and in supporting the prices of their products, by 
withdrawing from them these 30,000 persons at Lowell, and the 
very great additional population occupied in charge of the one hun- 
dred and twenty millions of other capital employed by Lowell, come 
into this reckoning. 

There are invested in the iron-works of the U«it«d States, ex- 
clusive of iron manufactories, upward of $20,000,000. (See Fish- 



408 BENEFITS OF NEW ARTS AND OF NEW PURSUITS. 

er's National Magazine, June, 1 S46.) Say $20,000,000. At the 
same rate of calculation, demonstrating the result in the case of the 
Glenham factory, at Fishkill, this $20,000,000 invested in the iron- 
works of the United States employs other capital, of all kinds, to 
the amount of $203,142,857, not reckoning the capital of labor 
employed in these works, and the beneficial effects on other spe- 
cies of labor from which this is withdrawn. 

The Hon. Mr. Ramsay, of Pennsylvania, gave to the house of 
representatives some instructive statistics on the coal-trade. (See 
National Intelligencer, September 1, 1846.) A part of them, bear- 
ing on the point now under consideration, lead to the following re- 
sult : that the investment of capital for the coal business, in the 
single county of Schuylkill, in canals, boats, horses, railroads, cars, 
locomotives, collieries, landings, working capital, coal-land, &c., 
&c., amounted to $26,856,000 ; that $9,330,000 of this was added 
under the tariff of 1842 ; that the agricultural products consumed 
in 1845 by those engaged in the coal business of that county, such 
as wheat, flour, corn, rye, buckwheat, oats, hay, straw, beef, pork, 
potatoes, poultry, butter, lard, milk, eggs, fruit, vegetables, &c., 
&c., amounted to $965,000 ; that the amount of the same products 
consumed in 1841 was only $588,000 ; showing an increase, in 
four years, of $377,000 ; that the merchandise of various kinds 
consumed, same year (1845), amounted to $1,758,000 — increase 
on 1841 of $840,000 ; that many articles of considerable amount 
were omitted in this reckoning ; that the farms in the county had 
doubled in value, and the value of those in adjoining counties was 
much increased by the same cause ; that the amount of anthracite 
coal taken to market had risen from 360 tons in 1820, to 2,000,000 
in 3 845 ; to all which should be added the navigation interest to be 
found in the coal-fleet, engaged in this trade, a part of which, some 
scores of vessels, is constantly seen waiting for and taking in car- 
goes, at the depot on the Delaware, above Philadelphia. The em- 
ployment which this trade gives to labor, the increased value which 
it imparts to both labor and property, and the wide-spread commer- 
cial activity which it creates, bringing profit to all parties, are but 
one instance of the power and benefits of aggregation, which a 
single great interest, like this, carries along with it. 

The whole manufacturing capital of the United States was esti- 
mated some years ago at $300,000,000. The Hon. Charles H. 
Carroll, of New York, in a speech in Congress, 1846 (see National 
Intelligencer, August 7, 1846), puts the minimum estimate, for the 



BENEFITS OF NEW ARTS AND OF NEW PURSUITS. 409 

present time, at $500,000,000. It will be sufficient for the present 
purpose, however, to take the first-named estimate of $300,000,000. 
If this aggregate be supposed to employ other capital of the coun- 
try, in the same proportion as the Glenham factory, without count- 
ing itself, or the wages of labor employed in the establishments, it 
puts in active operation, and profitably sustains, other property to 
the amount of $3,047,143,857. This, as must be admitted, is an 
astonishing result. 

Some manufactories may employ less, some more, of other capi- 
tal, in proportion to their own investments, than that at Fishkill, 
New York. No accuracy, however, derivable from the minutest 
information of facts, could vary this general result, so as to affect 
the lesson which it teaches, in showing how new arts and new cal- 
lings, in the aggregate, under a protective system, promote private, 
general, and national wealth. 

Manufacturing and other arts create the only market on which 
American agicultural labor can rely. Does not every one see this 
in the experience of the past? Look at a manufacturing village. 
How quick it raises the prices of land in the vicinity, and turns 
farms into gardens, which are the most profitable species of agri- 
culture. And not only is there this near benefit, but it branches 
out, and connects itself with the agriculture of the whole Union. 
Every new manufactory, of whatever kind, and in whatever place, 
gives life, activity, and profit, to agriculture, on a largo scale. By 
these estabhshments, the workshops of Europe are brought to the 
door of American farmers — are planted alongside of their fields — 
and the two parties supply each other's wants without the costs of 
transportation over seas, the farmer getting as much, or nearly as 
much, at home, as his products would command abroad, thus saving 
the costs of transport, and the parties retain among themselves all 
the profits of manufacturing skill and labor, and all the additional 
values which are imparted by art and labor to the raw material. 



410 THE EFFECTS OF A PROTECTIVE SYSTEM 



CHAPTER XXVL 

THE EFFECTS OF A PROTECTIVE SYSTEM ON THE PRICES OP 
AMERICAN LABOR. 

Consideration of the contradictory Averments on this Point. — The Facts of the Case. — 
Statistics bearing on the duestion. — The Effect of Low Wages on the Character of the 
People. 

A PROTECTIVE SYSTEM raises the prices of American labor. As 
this has been drawn in question, and even denied, not alone by men 
upon the common level of society, but by high and influential func- 
tionaries of the government of the United States, in their official 
documents, it becomes necessary to subject the question to the 
proof of facts. The president of the United States, in his annual 
message of 1845, said : " It," the tariff of 1842, " does not benefit 
the laborers, whose wages are not increased by it." His secretary 
of the treasury, in his annual report, accompanying that message, 
said : " The wages of labor have not augmented since the tariff of 
1S42, and in some cases they have diminished." — "The wages 
of labor did not increase in any corresponding ratio — or in any 
ratio whatever." In their annual documents of the same kind, for 
1846, they reiterate the same things in substance — the secretary 
more emphatically than before. He labors away with assertion, by 
a frequent and long-continued repetition of identical ideas. 

These, it will be observed, are assertions o^ fact. If it were 
proper to introduce such a topic in such documents, one might say 
with at least equal propriety, that it was imperatively incumbent on 
the authors to substantiate their assertions of fact with facts. This, 
however, was not attempted, and the documents were sent forth 
upon the community, with all the weight and influence of their high 
official character, as if there were no question of the facts asserted ; 
and it is the more to be regretted, as the facts asserted were not 
true, and could not be substantiated, as the evidence about to be 
exhibited will show. 

" The ratio" above referred to by the secretary, was the average 
increase of duties on protected articles, from 20 per cent, as they 
existed before the tariff of 1842, to upward of 40 per cent, by thst 



ON THE PRICES OF AMERICAN LABOR. 411 

act, as he says, though in fact it did not exceed 37 per cent. But 
that is no matter in this place. The secretary asserts, that, although 
" the average of duties was more than doubled," the wages of labor 
were not more than doubled, or " did not increase in a correspond- 
ing ratio." Resting the matter here, it would be hard to say what 
is proved. For who ever pretended, that the wages of labor rise, 
"in a ratio corresponding" with the average increase of duties? 
If they rise at all, it is a manifest benefit. But the secretary adds, 
" or in any ratio whatever." This latter is an important point. 
But it is singular, that, in the first member of the sentence, he 
should admit that they did rise, though " not in a corresponding 
ratio," and in the last member, deny it. He may be safely left in 
his own dilemma. But in another place he asserts positively, "that 
the wages of labor have not augmented since the tariff of 1S42, and 
that in some cases they have diminished." This manifestly brings 
us to the question. The president, as will be observed, stops a 
Uttle short of the secretary, and only says, that "the wages of labor 
were not increased by the tariff of 1842," which also brings us to 
the question — a question of fact. 

It might be asked with great force, did neither of these gentle- 
men ever think, that it is a blessing to labor, to have work ? Sup- 
pose its wages are not increased, if they are sufficient and satisfactory; 
will these gentlemen find fault with this, if the laborer himself does 
not? If they had dared to say, that there was no employment for 
labor, under the tariff of 1842, they would have made a decided 
case. But one says, wages did not increase ; and the other ven- 
tures to say, that in some cases they diminished. Did not increase 
from what standard ? That before the period of the tariff of 1842 ; 
or that which this period established ? This is a point of at least 
some, not inconsiderable, importance. If it could be known where 
these gentlemen mean to take up their position, one could not re- 
fuse a fair challenge on this question. Everybody knows that, in 
1840, labor went begging for bread, and could not always get it. 
The Hon. Simon Cameron, in the words cited from him below, 
tells us, and calls the president of the senate, Mr. Dallas, to wit- 
ness, that, in 1840, "there were over five hundred applicants — 
healthy, vigorous men — for the place of tip-stave,'*^ in a court of 
Philadelphia, "to get bread for their families". It is also a fact, 
that an ex-governor of Pennsylvania wept, when General Harrison 
was obliged to refuse him an office in that commonwealth, because, 
he said, " he was poor and needed it". 



412 THE EFFECTS OF A PROTECTfVE SYSTEM 

If the president and his secretary mean to say, that the wages of 
labor, under the tariff of 1842, did not rise above the level of wages 
in 1840, one would be very much surprised; and if they mean to 
say, that they did not rise above the standard of the period of the 
tariff of 1842, it is a simple truism; it is saying that a thing is equal 
to itself. 

Since, however, they have raised the question about wages of 
labor, they must meet the facts. First, then, they do not pre- 
tend, that labor could not find employment under the tariff of 1842. 
This point, settled, is a very important one. 

The following is an extract, ip point, from a speech of the Hon. 
Simon Cameron, United States senator from Pennsylvania, deliv- 
ered July 22, 1846, on the reduction of the tariff of 1842, while 
that of 1846 was under debate; and it is not the less valuable as 
coming from one of the same political party with the president and 
secretary, who have expressed themselves as above cited : — 

" The individual cases of distress, which pervaded the country 
for a period preceding the law of 1842, were absolutely heartrend- 
ing. Rich men not only lost their fortunes, but poor men lost their 
means of living. Our furnaces, and our forges, and our work- 
shops, were emptied ; our merchants were ruined ; and our far- 
mers, our substantial yeomanry, many of them with abundance of 
products, for want of a market, found themselves in the hands of 
the sheriff. Not a section of the whole country but afforded abun- 
dant evidence of the truth of this picture. . . I remember, and you, 
Mr. President [Dallas], doubtless know, that, in the organization 
of a new court in Philadelphia, there were over 500 applicants for 
the place of a tip-stave ! Healthy, vigorous men sought this station, 
to get bread for their families ! . . Do gentlemen desire these scenes 
renewed ? Will men never learn wisdom by experience ? How is 
it now [under the tariff of 1842] ? How changed the scene ! If 
a magician's wand had been waved over our country, the result 
would hardly have appeared more like enchantment, than the reality 
now before us. No man is idle who is willing to work. Contented, 
smiling faces are everywhere to be seen. The busy hum of indus- 
try gladdens the ear in all directions. Everybody is prosperous, 
and everybody happy." 

It was not necessary, then, under the tariff of 1842, for " five 
hundred healthy and vigorous men," to go begging for the office 
of "tip-stave" in a court of Philadelphia, "to get bread for their 
families," and for 499 of them to return to their families disap- 



ON THE PRICES OF AMERICAN LABOR. 413 

pointed ; nor is it likely that an ex-governor of any state will shed 
unavailing tears, because he was impoverished by the hard times 
of that era. The president and his secretary, apparently, did not 
think of this; they do not seem to have well considered, how much 
it is worth to labor, to be secure of employment ; nor were they 
well advised about the wages of labor, under the tariff of 1842, as 
the following facts will show : — 

For some two or three years before the tariff of 1842, most of the 
man\ifacturers of the country were obliged to compound with labor, 
at low wages, in hope of better times, or suspend operations. 

The Hon. Abbott Lawrence, i# his second letter to the Hon. 
William C. Rives, of Virginia, dated Boston, January 16, 1846, 
says: " I will give you an example of the rate of wages under low 
duties, and under the tariff of 1842. In 1841-'2, the depression 
in all kinds of business became so oppressive, that many of the 
manufacturing establishments in New England were closed, and 
the operatives dismissed, the mechanical trades were still, and ev- 
ery resource for the laboring man seemed dried up. In the city of 
Lowell, where there are more than thirty large cotton-mills, with 
from six to sixteen thousand spindles each, it was gravely consid- 
ered by the proprietors, whether the mills should be stopped. It 
was concluded to reduce the wages. This was done several times, 
until the reduction brought down the wages from about $2 to $1.50 
per week, exclusive of board. This operation took place upon be- 
tween 7,000 and 8,000 females ; the mills ran on ; no sales were 
made of the goods ; the south and west had neither money, nor 
credit: and finally, it was determined to hold out, till Congress 
should act upon the tariff. The bill [tariff of 1842] passed, and 
of course the mills were kept running, which would not have been 
the case if the act had been rejected ; and now the average wages 
paid at Lowell — taking the same number of females for the same 
service — is $2 per week, exclusive of board. Yet, Mr. Walker 
says, labor has fallen. Where are wages of labor, I ask, lower than 
they were in 1842 ? Who is to be benefited by the adoption of a 
system that gives up everything, and gives no reasonable promise 
of anything?" 

The same is true of the large manufacturing towns of Manchester 
and Nashua, New Hampshire. The Hon. Mr. Ramsey, of Penn- 
sylvania, in his speech on the tariff, house of representatives (see 
National Intelligencer, September 1, 1846), represents, that, from 
1837 to 1842, a large portion of the miners and laborers in the 



414 THE EFFECTS OF A PROTECTIVE SYSTEM 

mining regions of that state, were out of employment ; that the la- 
borers who got work, received only from $3.50 to $4 a week — 
and miners only from $5 to $6 — generally paid in goods, equal to 
15 or 20 per cent, discount ; and that in 1845— '6, laborers got 
from S5 to $6, and miners from $8 to $10, cash — average increase, 
30 per cent. 

This, in amount, was generally, if not universally, true of the 
manufacturing establishments of the country, of every description ; 
and it was equally true in every department of life, that eny)loys 
labor. Employment was never wanting under the tariff of 1842, 
and wages did increase — an average of full 25 per cent, higher 
than they were before. For further statistics on this subject, see 
note below.* 

The wages of labor in the mechanical trades, on railroads and 
canals, in agriculture, in common job-work of cities and towns, and 

* Everybody knows what savings-banks are instituted for, viz., to afford to 
labor a secure deposite for its savings. They now exist in many parts of the coun- 
try, and are a great blessing to the laboring poor. There are two items in the 
history of these institutions which are probably better evidence of the employment 
and prosperity of labor, than any or all other that could be given, viz., the com- 
parative numberof depositors and the comparative amount of deposites in a course 
of years. In the state of Massachusetts, the banks of savings are obliged by law 
to make annual returns to the legislature, of which the following are quotations 
for three years : In 1841, the number of depositors was 39,832 ; the amount of de- 
posites, $6,485,424. In 1842, depositors 41,102; deposites $6,675,878. In 1845, 
depositors 54,256; deposites $9,214,954. The first two years were under the dis- 
astrous period that preceded the tariff of '42; the last was the third year of the 
operation of that tariff. The comparison is instructive, and to the point. The 
increase from 1841 to 1842, was about 3 per cent, on depositors, and about 3^ per 
cent, on amount deposited. The difference between 1842 and 1845, was about 32 
per cent, on depositors, or nearly 11 per cent, per annum; and about 38 per cent, 
on amount deposited, or nearly 13 per cent, per annum. The amount of deposites 
in the savings-bank at Lowell, was, in 1841, $448,190; in 1842, $478,365; in 
1843, $462,650; in 1844, $591,910; in 1845, $730,890. At Portsmouth, New 
Hampshire, in 1842, $220,636; in 1846, $336,960. At Saco, Maine, in 1842, 
$29,667; in 1846, $48,157. It is believed that these facts require no comment, as 
it is well known for whom these institutions were established, and what classes of 
persons use them. The details of these statistics for about thirty banks of savings, 
will be found in Fisher's National Magazine, for March and June, 1846, proving 
the same thing, viz., that labor was never so prosperous, and never laid up ^o 
much, in a given time, as under the tariff of '42. 

The following is from the same magazine, for March, 1846 : — 

" Within the past year 200 houses have been built in Pawtucket, and the ad- 
joining village of Central Falls, all by the hands employed in the manufactories of 
the two places, some of which have cost upward of $2,000. 

'' The deposites in the Pawtucket savings-bank, amount, on an average, to $70,000. 

"The following are the prices paid for wages, in the years 1842 and 1845. Thej 
all relate to the same hands who were employed in both years : — 



ON THE PRICES OF AMERICAN LABOR. 415 

in every pursuit throughout the land, in the two periods under con- 
sideration — the former universally known as disastrous, and the 
latter as prosperous — are too well known to those concerned, to 
require certificates from other authorities ; and there can be but 
one voice from all these quarters, which, for one reason, we are 
sorry to say, is most remote from verifying the statements of the 
president and his secretary, above cited, on this subject. All the 
world know it is not so, and it ought not to have been necessary 
to adduce evidence on the point. But such are the facts, whereas 
not a single fact was cited by these public functionaries, to substan- 
tiate their assertions. 

The secretary also says: "When the number of manufactories 
is not great, the power of the system to regulate the wages of labor, 
is inconsiderable ; but as the profit of capital invested in manufac- 
tures is augmented by the protective tariff, there is a corresponding 
increase of power, until the control of such capital over the wages 
of labor becomes irresistible." 

Wages for Dec. 1842. Dec. 1845. Wages for Dec. 1842. Dec. 1845. 

Female Weavers $1112 $17 03 Female Weavers. . ..$11 30 $18 64 

« « 1116 18 80 Engineer, per day... 133 175 

« « 10 76 17 80 Machinist 133 175 

« « 12 60 2185 Firemen 75 100 

« " 13 32 17 27 Sparegirls,per week. .18to 21s. 4 00 

" Before the protective duty was enacted, the best workmen could only obtain 
one dollar per day ; the same men now receive one dollar and a half per day." 

Another important item of evidence on this subject will be found in the same 
magazine for May, 1846 :— 

" Mr. R. Fisher : Sir — In answer to your queries on the subject of labor in the 
following years, we state as follows :— 
The Price of Wages per Day, for Masons and Laborers^ in the Month of May, in 

the follorving Years : — 
1832.. Masons, 13 shillings. Laborers, 7 shillings. 
1835.. « 14 « « 8 « 

1836.. « 17 « « 10 « Aflerthe great fire in New York. 

1837.. « 15 « « 8 « 

1838.. « 13 « « 7 « 

1839.. " 13 « « 8 « Great expansion of the currency. 

1840.. « 12 " « 6 « 

1841.. « 12 « «« 7 « 

1842.. « 11 « « 7 « 

1843.. « 12 « «« 7 « 

1844.. « 13 « « 8 « 

1845.. " 14 « « 8 « 

" In addition to the rise in the wages, from 1842 to 1845, there have been em- 
ployed from 50 to 75 per cent, more men than there were from 1838 to 1842. 

"Joseph Tucker, Amos Woodruff.) ,_ , . . ^, ^.. 

« Wm. Tucker, James Webb, i ^^^^«"J^^ *« ''^^ ^-i/y 

« James Harriot, Samuel Oliver, ) °-^ ^^^ ^^*^' 



416 THE EFFECTS OF A PROTECTIVE SYSTEM 

Here is a double assumption, involving two untruths. If man- 
ufactures were monopolies, as they are sometimes falsely called, that 
is, if they had exclusive privileges — for nothing else can be a 
monopoly — then there might possibly be some foundation for such 
a statement. But the more manufactories are encouraged, multi- 
plied, and extended, under a protective tariff, and the more capital 
there is vested in them, so much greater are the chances of labor, 
and so much greater is its relative power. When the manufactories 
are few, and the competition between them small, their power rela- 
tive to labor is greater ; but when they become numerous as com- 
petitors, and rich in capital, their rivalship with each other is all for 
the advantage of labor. In the former case, labor pays court to 
them, and is obliged to receive terms: in the latter, labor dictates 
terms, and becomes the object of courtship. 

The effect of low wages is to demoralize, to debase, to de- 
grade man, and render him unfit to aspire to freedom, and unfit 
to enjoy it. Working ever for a bare subsistence, and hardly 
that, without hope of a better condition, leaves no place for 
pride, self-respect, and ambition. That debasement of mind, 
which is everywhere observable among the laboring classes 
of Europe, whose task is hard, and whose prospect of an im- 
provement in their condition is hopeless, is the necessary effect 
and uniform concomitant of such a doom. Reduce those de- 
pendent on labor in the United States — which comprehends a ma- 
jority of the people — to such low wages, by the establishment of 
Free Trade, which would be the inevitable result, and the moral 
effect would be the same. The character of the people would be 
entirely changed. The government would be changed — all would 
be changed. Labor would then be the agent of ])ower, and not 
an independent agent. 

The power of foreign pauper labor over the labor of American 
freemen, is not vested in itself, but in the arm of its oppressors. 
It is a mere agent of the latter. Nor can that power be abated, 
except by a change of political society in those quarters, for the 
emancipation of labor. So long as political society is the same 
there, and the same here, there can never be a time when ''the 
protected arts" in the United States, " shall have acquired such 
strength and perfection as will enable them subsequently, unaided, 
to stand up against foreign competition." No matter what strength, 
no matter what perfection tliey may acquire, they will never be 
strong enough, never perfect enough, to employ free labor at a fair 



ON THE PRICES OF AMERICAN LABOR. 417 

price in a field of competition with the same arts worked by forced 
labor at a price which barely supports existence. 

The question, then — the great, practical, momentous question 
— is, shall European capital and labor, in a field of open and 
Free Trade, be permitted to bring American capital and labor, that 
is, American society, down to the same level? Or shall American 
society, by tlie American government, 'protect American capital 
and labor, and maintain the position to which the cost of American 
freedom has elevated them? 

The great battle of the world is between freedom and despotism; 
and more than in anything, or all things else, the form under which 
that contest is now carried on, is between European capital and 
labor on one side, and American capital and labor on the other. 
On this pivot turns the destiny of nations. Sustain the position 
of American capital and labor, that every man maybe secure of the 
fair reward of his exertions, however humble his birth and calling, 
and freedom will prevail all the world over. The American peo- 
ple, united and resolved in this great emprise, can beat the world — 
the wfiole world — and crumble into dust the bulwarks of despotic 
sway. But, let European capital and labor, in the hands of Eu- 
ropean despots, PREVAIL against American capital and labor, for 
want of protection to the latter, and there is an end of freedom, till 
another cycle of ages, with its sad round of experience, shall burst 
the chains again, and they who succeed shall better appreciate their 
duty and their chances. 

The batde for American freedom was only begun in the estab- 
lishment of American independence. The commercial systems of 
Europe are more to be feared than all the power of European 
arms. It is much to say, yet it may be true, that a perpetual war 
would be less expensive and less perilous than the effects of this 
occult, silent, insinuating, all-pervading power, if unresisted, 
27 



418 THE EFFECTS OF A PROTECTIVE SYSTEM 



CHAPTER XXVII. 

THE EFFECTS OF A PROTECTIVE SYSTEM ON THE INTERESTS 
OF AGRICULTURE. . 

Not true that Agriculture has no Share in the Benefits of a Protective System. — Facts and 
Statistical Evidence on this Point. — Breadstuffs, in ordinary Seasons, cheaper in Europe 
than in the United States. — The Effect of Indirect Protection of Agriculture. — Protec- 
tion of Slave-grown Staples — Slave Labor in the United States needs Protection more 
than Free Labor. — All Nations can and intend to supply their own Mouths. — Great 
Britain the greatest Exporter of Agricultural Products, of any Nation in the world. — 
Evidence of William Brown, Esq., on this Point. — The Importance of this Fact in a 
System of Public Economy. — Statistics showing that Europe is Independent of the Uni- 
ted States for Breadstuffs. — The Problem as to whether American Indian Corn will find 
a permanent Market in Europe. — European Agricultural Labor will always beat Amer- 
ican Agricultural Labor in Market, because of its Low Price. — The Effect of a Protec- 
tive System in sustaining and raising Prices of Agricultural Labor and Products. — 
Showing of the Effects of certain Items of the Tariff of 1846 on the Interests of Amer- 
ican Agriculture. 

The influence of a protective syStem on agriculture, has been, 
in no small degree, already set forth in these pages. Nevertheless, 
it is a point of too much importance to be passed over, so long as 
other evidence, of an equally impressive character, remains to be 
considered. 

It is sometimes erroneously supposed and maintained, that far- 
mers and agriculturists have no share in the benefits of a protective 
system. If, indeed, what is thus falsely asserted, were so far true, 
as that they should receive no direct protection, it will yet appear, 
that the protection they receive indirectly, under such a system, is 
not only most important to them, but would in itself be an abun- 
dant compensation for the sacrifices which, it is alleged, are im- 
posed upon them, but which, however, as will be seen, are no sac- 
rifices at all. But it will appear that the direct protection provided 
for agriculturists, under the system, is on an average as great, or 
greater, than that which is afforded to manufacturers and mechan- 
ics. For example, the direct protection granted by the tariff of 
1842, to the following articles, wool, hemp, beef, pork, hams, bacon, 
cheese, butter, lard, potatoes, flour, wheat, and raw cotton, was an 
average of about fifty per cent., which is at least equal to, and some- 
what above, the average protection granted to any other class, man- 
ufacturers, mechanics, or whatever; and protection to most of these 
products of agriculture is very important, when the crops are good 



ON THE INTERESTS OF AGRICULTURE. 419 

and other of these articles are abundant in all parts of the world. 
Before the potato-rot fell upon Ireland, an impost of ten cents a 
bushel could not keep this vegetable from being imported into the 
United States in considerable quantities; and the secretary of the 
treasury estimated an increase of its importation, by the reduction 
of the duty in the tariff of 1842, by that of 1846, from 36 to 20 
per cent., so as to add to the revenue $150,000. The annual 
average of our imports of wheat, from 1831 to 1844, inclusive, 
was 425,442 bushels; and in 1837, we imported 4,000,000 of 
bushels, and 2,389,102 bushels in excess of our exports. And 
the aggregate excess of exports of wheat over imports, for these 
fourteen years, was only 5,065,390 bushels. [«See Fisher^s Na- 
tional Magazine^ for Aprils 1846.] 

The importance of direct protection for wheat and other grains, 
will appear from the facts that, in years of ordinary plenty, they 
are cheaper in Europe than in the United States, and that the cost 
of transportation from Europe to our ports, is less than from the 
west of our country to the east. The average price of wheat per 
bushet, at the following places in Europe, from 1830 to 1843, in- 
clusive, viz., at Dantzic, was 91 cents ; at Hamburg, 90 cents ; at 
Amsterdam, 99 cents ; at Antwerp, 98 cents ; and at Odessa, 64 
cents. The average price at the seaports of the United States, for 
the same years, was $1.25. The cost of transportation from 
Michigan to New York, is 30 cents per bushel ; and from Europe, 
not over ten, sometimes down to six cents. From the Mediter- 
ranean, it costs from 12 to 16 cents per bushel. The average cost 
of transportation of wheat from the western country to New York, 
may be put down at 3 to 1 of the cost from Bremen to the same 
point. In 1836 and '37, years of short crops in the United States, 
large quantities of barley were imported on commission for brew- 
ers in New York, Albany, and other towns on the Hudson, at a 
cost, including all expenses, of 55 cents per bushel, when the mar- 
ket price here was about one dollar; and large quantities of rye 
were imported for the same object, at a cost of 63 cents, when the 
price here was $1.25. [6ee National Magazine, for January , 
1846, pp. 709-'10.] 

Hence the importance of protective duties to agriculture. The 
years of famine in Europe can not be expected to continue. Alas 
that American farmers should be obliged to rely on such a cause 
for a market and good prices ! Providence may yet force us, in 
our turn, to go to Europe for bread. As already seen, though 



420 THE EFFECTS OF A PROTECTIVE SYSTEM 

not reduced to distress, we were partly supplied with bread from 
that quarter in 1837, by reason of short crops. 

The indirect effects of a protective system in sustaining and 
raising the prices of agricultural products and labor, and in increas- 
ing the demand for them, assert a very strong claim for a full con- 
sideration. This is more important and more effective than direct 
protection, though the average of the latter, as seen above, is not 
exceeded by that bestowed on those things which are commonly 
supposed to be the chief objects of protection. 

It is convenient in this place to distinguish between those prod- 
ucts of American agriculture which are common to this country 
and all others, or most others, with which we trade, and those not 
common. Of course, exotic productions which we do not raise or 
produce at all, do not come within the scope of this question ; and 
there are three or four slave-grown staples of considerable impor- 
tance, which, though produced in some other countries, occupy a 
peculiar position, and will on that account claim a separate consid- 
eration, especially cotton. It may be remarked, however, in pas- 
sing, that tobacco, as an agricultural product, which is chiefly 
though not exclusively a slave-grown staple in the United States, 
is yet essentially benefited by protection of its manufactured forms. 
Rice, as an American product, and a slave-grown staple, demands 
and receives protection. Sugar is also a' slave-grown staple ; but 
it requires protection only as a manufactured article. While the 
prices of this article are reduced by protection, as before shown, 
the value of the agricultural labor, in raising the cane, is enhanced 
by it ; so also the labor of making the sugar, as it is done by the 
same hands. This benefit to this species of agriculture is proved 
by the fact that those engaged in it demand protection. Nothing, 
therefore, of the slave-grown staples of importance remains, except 
cotton, which is considered in another place. 

Slave-labor invariably demands protection, much more than free 
labor, in all its work that is common to free labor, because the for- 
mer is not only more expensive for a given amount of its products, 
but because a free man works for himself, while a slave works for 
a master. In raising cotton, rice, and sugar, slave-labor has no 
competitor in free ; and in cotton, it has no rival anywhere, except 
in certain foreign parts, which, as shown elsewhere, is of no con- 
sequence. But in every department of labor performed by slaves 
in the United States, whether in agriculture, manufactures, or me- 
chanics, which has a rival in free labor, slave-labor demands pro 



ON THE INTERESTS OF AGRICULTURE. 421 

tection against the foreign product much more than free labor. It 
can not subsist permanently without protection, as it would in the 
end eat up itself, and expire of its own vis inertice. There never 
was a greater mistake than for slaveholders in the United States 
to go for Free Trade. In economy, their slaves occupy precisely 
the position of the ox, horse, and mule, of the northern farmer. 
Nor is it the same position as that of the pauper-labor of Europe, 
which raises and supports itself on the pittance allowed. Slaves 
are more expensive. We are not the advocates of slavery. We 
speak as an economist. Slavery in the United States, without 
a protective system, would as certainly run out, extinguish itself, 
as the sun is sure to rise and set, except so far as it may be de- 
manded for the production of those staples which free labor can 
not produce. Under a system of public economy for the United 
States, as one nation, in its foreign commercial relations, free labor 
could do without protection much better than that of slaves. 

But, to return to our proposition, that, in addition to the benefits 
which agriculture derives from a direct protection of its products, 
it is also benefited even more essentially and more considerably by 
the indirect influence of a general and comprehensive protective 
system, in sustaining and raising the prices of its products, xind 
consequently sustaining and raising the prices of agricultural labor. 
This proposition applies not only to those agricultural products 
which we raise in common with all or most other countries, but to 
those which are, for the most part, and some of which are alto- 
gether, peculiar to this country. 

But, first, in regard to agricultural products which are common 
to this and all or most other countries. Bread-stuffs and those 
things which are necessary to man's subsistence, are common to 
almost all countries of any considerable extent of territory. Sav- 
ages generally find wherewithal to support existence, and can easily 
do so, where there is enough of the virtue of providence among 
them. But, in the advanced stages of civilization, as in Europe 
and some other parts, a country can not be found where the peo- 
ple do not endeavor to raise enough of bread-stuffs, animal food, 
and other esculents, or where the government does not encourage 
the raising of enough, to satisfy all the mouths that are in it, so far 
as necessaries are concerned. All Europe is abundantly provided 
for in this particular, except in a general or partial failure of the 
crops, against which, as a Providential event, no^human foresight, 
care, or labor can be fully prepared. Even the great manufact^^r- 



422 THE EFFECTS OF A PROTECTIVE SYSTEM 

ing nation of Great Britain is able, and for the nnost part intends, 
by its public policy, and by the practical operation of its system 
of society, to supply all its own mouths, from its own soil and fish- 
eries, with the necessaries of life ; and it has vast tracts of land 
not yet reduced to culture. But being a manufacturing nation, and 
requiring custom of other nations for her manufactured products, 
her policy is, in part, to suppress agriculture at home by not cul- 
tivating all her soil, so as to keep up appearances of a reciprocal 
exchange with her customers. But it will be found that the amount 
of the raw agricultural produce, which she is capable of raising at 
all, imported or bought by her, is trifling; and that the amount of 
her own agricultural produce exported in the forms of her manu- 
factures, is many times in excess of all that she imports in the raw 
state for purposes of food. The following statements are to this 
point : — 

William Brown, Esq., a British Free-Trader and merchant, in 
his letter to John Rolph, Esq., a landholder, which appeared in 
the " Economist," a British Free-Trade journal, of November 15, 
1845, says : *' Paradoxical as it may appear, 1 think Great Britain 
is the largest grain-exporting country in the world, although it is 
impossible to estimate accurately what quantity of grain, &c., is 
consumed in preparing .£50,000,000 [$242,000,000] value of ex- 
ports [manufactured], by which you [landlords] so greatly benefit. 
It is placed in the laboratory of that wonderful intellectual machine, 
man, which gives him the physical power, aided by steam, of con- 
verting it into broadcloths, calico, hardware, &c. ; and in these 
shapes your wheats find their way to every country in the world. 

. We are dependent on foreigners for using our wheat in the 
shape of broadcloths, &c. ; and I wish we were more so. . . You 
fancy other nations are untaxed, and have no national debt. Pray 
point them out. I think you will find, on inquiry, that the taxa- 
tion of this country, taking into view its wealth and ability to pay, 
is as light as in any country I know, even in the United States. 
Indeed, I have been much astonished at the burdens which some 
of the states have to bear, and in part from a direct land-tax. . . 
You speak of how small an amount of value in bread is consumed 
by the working classes, adding that, if the price were lower, it 
would also take away rent altogether ; but you forget beef, pork, 
mutton, milk, butter, cheese, potatoes, &c., and that rent is not a 
large portion of the cost. If wheat, the most convenient article 
for transport, is a little cheaper, other articles of agricultural prod- 



ON THE INTERESTS OF AGRICULTURE. 423 

uce would advance, under a prosperous trade. Any wheat that 
would come here, would only help to keep at home our 100,000 
human machines [who annually emigrate], and sustain our 400,000 
annual increase, and again be sent away in the shape of the prod- 
ucts of our industry. . . The fact is, instead of keeping our peo- 
ple at home to manufacture for the rest of the world, and be your 
best customers at your own door for the products of the soil, our 
anti-commercial policy is forcing them to emigrate, to seek work 
elsewhere ; and other nations are employing their hands to do what 
we could have done better for them, and at a lower price. Sup- 
pose we imported all the wheat required for their use : consider 
the amount of wages [of the manufacturing operatives] that would 
reach the agriculturist, directly or indirectly, for other descriptions 
of your produce, independent of wheat. Nor need you be afraid 
of the United States. Their population is increasing still more 
rapidfy than that of Europe, and their growth of wheat is not ex- 
cessive. In 1843, it was but 12,500,000 quarters; in 1844, it 
was under 12,000,000 ; of Indian corn, in 1843, it was 62,500,000, 
and in 1844, only 53,000,000 of quarters. You are aware that 
our growth of wheat is estimated at 18,000,000 of quarters ; and 
of all kinds of grain, beans, &c., 60,000,000. . . It is obviously 
our true policy to increase our trade with other nations. . . With 
the advantages we have in climate, capital, security for property, 
intelligence, machinery, improved agricultural implements, and 
above all, in the immense and cheap supply of the moving power, 
coal, we can afford to give higher prices for agricultural produce, 
to sustain the rent-rolls of the landlords, and maintain England as 
the most powerful and prosperous kingdom, and the principal work- 
shop of the world. . . I have shown you, that the introduction of 
our manufactures into other countries, is the medium through which 
we export, and obtain high prices for your wheat and other agri- 
cultural productions." 

There is one great principle or doctrine of public economy dis- 
closed in the above extract, which, in a subsequent part of this 
chapter, is more fully elucidated, and which, vital, important, and 
all-pervading as it is, in every practical system, has not even been 
recognised by the standard economists of the age. It will be seen, 
after reading the above, thaf we refer to the incorporation of agri- 
cultural labor and products with the products of manufacture. No 
system of public economy can begin to be what it ought to be, that 
overlooks this comprehensive element. There is no other that 



424 THE EFFECTS OF A PROTECTIVE SYSTEM 

enters more essentially, or pervades more thoroughly, the opera* 
tions of the commercial world, as they affect this branch of knowl- 
edge ; and no one, left unconsidered, that would lead to so great 
a defect of a system. . It is impossible, indeed, to understand the 
true economy of any great nation, without understanding this. 

But the particular purpose for which we have here introduced 
the above extracts, is to call attention, by such incidental evidence 
— the more conclusive because it is incidental — to the competen- 
cy, even of Great Britain, to feed her own mouths, where no ex- 
traordinary events of Providence, as by the failure of the potato 
and other crops in 1845 and 1S46, should disappoint human cal- 
culations. Her usual production of bread-stuffs is but a little short 
of her own wants. 

But Europe is emphatically the wheatfield of the world. With 
a superficial area of 3,650,000 square miles, four sevenths of which, 
according to M'Culloch, are adapted to the cultivation of wheat, 
including all the densely-peopled regions, and with a superabun- 
dance of laborers to work at wages from six to twelve cents a day, 
with an ordinary product of that part of the world, the wants of Great 
Britain are not likely to be without supply at prices which no Amer- 
ican can or will work for. The tables in the note below will give 
some instruction on this point.* 

It is stated above that Great Britain exports many times of her 
own agricultural products, in excess of what she imports, for pur- 

* Importations of Wheat into Great Britain, from the principal Wheat Couvtriesy 

far 1841, 1842, and 1843, in Bushels, together with the Sum total from each 

Country. 

Countries. 1841. 1842. 1843. Total. 

Russia 498,205 1,824,688 269,368 2,592,261 

Denmark 1,9!5,279 617,656 565,248 3,098,183 

Prussia 7,134,400 5,938,065 5,311,000 18,383,455 

Germany 5,295,674 1,626,172 1,027,224 7,949,070 

Holland... 815,964 73,979 6,864 896,507 

France 1,643,932 4,216,100 29,248 5,889,280 

Italy and Islands 901,600 4,878,597 24,840 5,805^037 

North Am. Colonies.. 2,333,354 3,729,690 2,790,504 6,853,548 

United States 1,107,840 1,195,873 749,601 3,053,278 

Other Countries 866,859 1,816,340 272,407 2,955,606 

These three years, 1841, 1842,. and 1843, were the years of the largest importa- 
tions of breadstuffs into Great Britain, ayeraging 18,300,000 bushels; whereas, 
the average from 1829, to 1843, including fifteen years, was only 10,964,896 bushels. 

It is generally allowed, however, that Great -Britain ordinarily requires an aver- 
age annual supply of wheat from other countries, of about 15,000,000 of bushels. 
or 1,500,000 quarters, which is about one twelfth of her own product, as staled by 
Mr. Brown, above. The proportion of this supply from the United States, f>ccord- 
ing to the above table, is about one twentieth. 



ON THE INTERESTS OF AGRICULTURE. 425 

poses of food. As Mr. Brown says, there can be no accurate es- 
timate on such a proposition. The Hon. Andrew Stewart, M. C. 
of Pennsylvania, has proved that we buy of Great Britain at least 
eight dollars' worth of her agricultural products, in the forms of 
her manufactures, to one dollar's worth which she takes of us, 
other than cotton and tobacco. Her average atmual import of 
wheat, from all parts of the world, does not probably exceed the 
cost of $12,000,000; while her export of manufactures is stated 
by Mr. Brown, above, at $242,000,000 — it is more than that, 
indeed. One half of this at least, that is, $1 21,000,000, as proved 
by Mr. Stewart, is made up of her agricultural products, which other 
nations buy of her. Well might Mr. Brown say that Great Britain 
is the largest grain-exporting country in tke world. 

Of course, no one will pretend that the present almost famine in 
Europe (in 1847) establishes any rule on this subject. The four 
sevenths of the soil of Europe, which is adapted to the cultivation 
of wheat, is about equal to the area of the whole United States, 
exclusive of Texas and Oregon. Only about one fourth of this, 
lying in the middle and northwestern states and territories, can be 
relied upon for a surplus production ; and very little more is adapted 
to wheat. It is remarkable that the exports of wheat and flour 
from the United States have not materially increased for half a 
century. The wheat-crop of the United States in 1840, was 
84,823,000 bushels ; and in 1844, it was 95,607,000 bushels. For 
fourteen years previous to 1846, the average annual export of 
wheat from the United States, to all parts of the world, was 5,505,- 
000 bushels ; in 1836, only 805 bushels ; in 1838, 41,475 bushels ; 
in 1837, we imported 4,000,000 bushels : deduct the imports, and 
the average of fourteen years was about 5,000,000. What is 
this to the whole product of nearly one hundred millions of bushels, 
all which found a home market, except the above fraction of a little 
more than one twentieth ? 

It will be found it was never expected that Great Britain would 
be supplied with bread-stuffs from the United States in case of the 
abolition of the corn-laws, from the facts stated in the note below.* 

France is virtually independent in the production of her bread- 
stuffs, as will appear from the fact that the aggregate value of her 
imports of grain and flour, from 1833 to 1840, inclusive, was 

* In 1840, the British government called upon their consuls, at some of the prin- 
cipal marts of the corn-trade, to inform them what amount of grain could be sent 
to the English market in case the English duty were reduced to a nominal sum. 



426 THE EFFECTS OF A PROTECTIVE SYSTEM 

$25,941,758, and of her exports $24,115,751, the excess of Im- 
ports for the whole term of eight years, being only $825,997. 

Having shown that Europe is the granary of the civilized world 
— at least a sufficient one for itself in ordinary times — and that it 
is competent to supply all mouths in its own domain, it will be per- 
tinent to our present aim to exhibit the comparative prices of bread- 
stuffs in Europe and in the United States, taking wheat as the 
standard for a sufficient term of years to decide in which of these 
two quarters agricultural labor is best rewarded. The subjoined 
tables and facts are from the Hon. Charles Hudson's speech, de- 
livered in Congress, February 26, 1846, to whose labors we are 
indebted for much information on this subject.* 

The substance of their replies will be seen in the following table, submitted, with 
their report, to parliament, in 1841 : — 

Bushels. Bushels. 

St. Petersburg 1,540,000 Stettsie 2,000,000 

Liebau 240,000 Memel 47,712 

Warsaw 2,400,i<00 Hamburgh 4,304,000 

Odessa 1,200,000 Elsinore 1,400,000 

Stockholm 8,000 Palermo 1,600,000 

Dantzic 2,520,000 

Konigsburg 520,000 Total 17,779,712 

From these twelve ports it appears that a supply of 17,779,712 bushels of wheat 
could be obtained annually; and it further appears, that 7,298,000 bushels of rye, 
6,820,500 bushels of barley, and 6,445,700 bushels of oats, could be supplied. In 
this list is not included Riga, Rotterdam, Antwerp, and several other important 
ports for the corn-trade. 

The above promises of supply are more than 8,000,000 of bushels in excess of 
the annual average of imports of foreign corn into Great Britain, from 1829 to 
1843, inclusive, 15 years, and of course demonstrate an absolute independence, as 
to any necessary supplies from the United States. 

• " The following table will show the prices of wheat per bushel in the princi- 
pal marts of trade on the continent of Europe, from 1830 to 1843, inclusive : — 



1830. 
1831. 
1832. 
1833. 
1834. 
1835. 
1836. 
1837. 
1838. 
1839. 
1840. 
1841. 
1842. 
1843. 



Janlzic. 


Hamburg. 


Amsterdam. 


Antwerp. 


Odessa 


$1.07 


$0.93 


$1.13 


$0.95 


$0.68 


1.18 


1.19 


1.15 


1.07 


71 


93 


90 


1.10 


90 


62 


83 


70 


89 


* 55 


61 


70 


67 


66 


50 


77 


61 


65 


70 


68 


67 


70 


79 


76 


70 


52 


73 


76 


81 


99 


50 


94 


79 


1.20 


1.48 


66 


96 


1.15 


1.33 


1.37 


79 


1.07 


1.30 


1.11 


1.48 


71 


1.23 


99 


1.09 


1.45 


74 


J.IO 


1.11 


1.11 


95 


65 


76 


82 


78 


76 


48 



Average 91 90 99 98 64 



ON THE INTERESTS OF AGRICULTURE. 427 

It appears, therefore, from the foregoing-cited facts, first, that, 
according to Mr. Brown, Great Britain exports far more agricul- 
tural products than any other nation in the world, in the guise of 
her manufactures, which is undoubtedly true ; secondly, that tlie 
ordinary amount of her imports of bread-stuffs is only about one 
twelfth of her own products, which goes forth again to all the 
world in her manufactured exports, as only a small fraction of her 
exports of the products of agriculture in the same forms ; thirdly, 
that more than one half of Europe, and not more than one fourth 

" Here we have the prices of wheat, at five great marts of the wheat-trade, for 
14 years, showing a general average of 88 cents per bushel. 
*' The prices at our own seaports during the same period, run as follows : — 

In 1830 $1.15 In 1837 ...$1.83 

1831 1.18 1838 1.54 

1832 1.15 1839 1.42 

1833 1.13 1840 1.10 

1834 1.08 ]8tl 1.03 

1835 1.19 1842 1.16 

1836 1.44 1843 1.00 

"The general average of the afbrenamed prices is $1.25; being 37 cents more 
than the average per bushel at the aforementioned ports on the Black sea and 
Baltic. This shows demonstratively, that, in the first cost of the grain, we are not 
able to come into fair competition with trans-atlantic wheat-growers. And how is 
it with reference to freight ? By official documents laid before parliament, it ap- 
pears that the freight, on the highest calculation, can not exceed, on an average, 
13 cents per bushel. By the report of the Hon. Mr. Ellsworth, commissioner of 
patents, laid before Congress in 1843, where he examines this subject somewhat 
minutely, it appears that the average freight from New York to Liverpool is 35 
or 36 cents per cwt. We can not estimate wheat ai less than 56 pounds per 
bushel; and hence the freight must amount to 17 or 18 cents per bushel. The 
difi'erence in the freight and first cost would make a balance against us of 41 cents 
per bushel. But as the year 1837 was one of uncommonly high prices in this 
countrj', I will omit that year in my estimate, which will reduce this balance down 
to about 36 cents ; and from this I will deduct, for the difference of exchange, 10 
cents, which will bring the difference down to 26 cents per bushel. 

"The English consul, writing from Odessa, at the close of 1842, says: Under 
present circumstance?, extraordinary low freight and favorable exchange, a ship- 
ment of the best wheat could now be made and delivered in England on the fol- 
lowing terms, viz. : — 

First Cost , 22s. 6d. per quarter 

Charge of loading 2 5 " 

Freight 6 7 « 

Insurance and Factorage in England 4 " 



Total 35 6 « 

"This reduced to our currency would amount to 97 cents per bushel delivered 
in England. And in 1843 there was a still further reduction : so that wheat from 
the Baltic could be delivered in England without duty at 87 cents, and from the 
Black sea at 78 or 80 cents per bushel ; a price much less than our wheat could 
Ke purchased at in our own ports." 



428 THE EFFECTS OF A PROTECTIVE SYSTEM 

of the United States, exclusive of Texas and Oregon, is adapted 
to the culture of wheat ; fourthly, that the wages of agricultural 
labor in Europe are not over one fourth of the wages of the same 
kind of labor in the United States ; fifthly, that the average price 
of wheat in Europe, for a course of years, and with ordinary crops, 
sufficient to establish a general rule, is but a little in excess of two 
thirds of the average price in the United States, under like circum- 
stances ; sixthly, that the cost of transportation from the wheat- 
growing countries of Europe to those parts where their surpluses 
are in request, is, by a very large fraction, less than the cost of 
carrying from the United States to the same markets ; and seventhly, 
that the exports of wheat from the United States have not mate- 
rially increased for the last fifty years. 

We are aware it is thought by many that Indian corn will here- 
after be the great export of bread-stuffs from the United States to 
Europe. That, however, is yet not only an unsolved problem, but 
one at least of a dubious result. Mr. Brown, cited above, says: 
*'I am afraid we could not get a very, large supply of Indian corn, 
as the bulk, compared with the value, would make it a very ex- 
pensive article of import." The demand for it, in 1847, by starv- 
ing millions, is no guide for the future. It is the interest and policy 
of all nations to supply themselves with bread-stuffs from their own 
domains as far as possible ; and there is no part of the world better 
fitted, or better able to do it, than Europe. It may therefore be 
predicted that this expectation of finding a market in Europe for 
our Indian corn, to any great extent, will be turned into disap- 
pointment. The question is simply, whether Europe will supply 
its own mouths, as it ever has done ; and there is little doubt that 
it will, in years of good crops. But, however well pleased the 
starving people of Great Britain and Europe may be with our In- 
dian corn, when Providence has cut off their crops, it is morally 
certain, when they are blessed with good crops again, that they will 
not be customers to American labor to fill the mouths which can 
be fed for one half or one fourth the cost by European labor. It 
is the comparative cheapness of European labor that will necessa- 
rily and for ever, in ordinary times, exclude American bread-stuffs 
and other esculents, for the most part, from the European market. 
Even if the wages of American labor should be brought down to 
the same level with those of Europe, still the difficulties of obtain- 
ing the European market, to any considerable extent, for the prod- 



ON THE INTERESTS OF AGRICULTURE. 429 

nets of American agriculture, whicli are common to both parts, 
wrould be insuperable. It can never be relied upon. 

The question, then, arises, where is American agricultural labor 
to look for an adequate and secure reward ; and where are Ameri- 
can agricuftural products, common to Europe and other countries, 
to find a permanent and reliable market, that will be remunerative 
to the parties concerned? This is the question, and the great 
question, which can be answered only by a consideration of the 
effects of a protective system on these interests. The effects of 
direct protection, in these particulars, have already been consid- 
ered. It remains to notice its indirect effects, which are more 
comprehensive and more important. To avoid repetition, as far 
as possible, we must take leave to refer to chapter xxv., for a con- 
densed view of cumulative evidence on this point. All that is there 
said of the reciprocal influence and benefits of new arts and new 
pursuits, which a protective system calls into being; of their influ- 
ence and benefits on all pre-existing arts and pursuits ; and of the 
aggregate influence and benefits of all arts and all pursuits on each 
and every other under such a system, belongs to this branch of the 
subject. Much is there exhibited of the benefits accruing to agri- 
culture from this system, which it is unnecessary to repeat here. 
But still, litde more than glimpses of these benefits are there pre- 
sented. They consist of two principal classes : first, in a protec- 
tion of American agricultural labor from being forced into a com- 
petition with the low-priced labor of the same kind in Europe and 
y other foreign parts ; and next, in creating a home market for Amer- 
ican agricultural products, and in securing for them better, firmer, 
and more reliable prices : thereby sustaining and enhancing the 
value of American agricultural labor and capital. 

It is manifest, that when the products of American agricultural 
labor are brought into a free and open market with the products 
of European and other foreign labor of the same kind, the labor 
itself is in the same market; and that the tendency is to reduce 
the price of American labor to that of foreign labor. We say the 
tendency, and that tendency will be instantly felt on the side of 
American labor. We have before indicated the reason why Amer- 
ican labor, in such a case, will not come entirely down to the old 
level of European labor. The water of one cistern which is higher 
than that of another, will raise the other, by being let off into it, 
Defore both come to a common level. If the capacity of the two 
cisterns were equal, the common level would be found midway of 



430 THE EFFECTS OF A PROTECTIVE SYSTEM 

the difference. But the American cistern is a very small one com- 
pared with all the rest of the world, and being let off, would fall 
immensely, while the other would scarcely seem to rise. 

American labor can not tell why, for it does not understand the 
subject, except instinctively ; but it is distressed the moment it is 
forced into any degree of competition with European and other 
foreign labor, for want of adequate protection. First, there is a less 
active demand for American labor in such a case ; and next, its 
prices begin to fall. It is embarrassed to tell why, unless it be well 
instructed on the subject, and has thought of it much. But it feels 
it, knows it, is distressed by it. The effect is as certain to follow 
the cause, as the sun is to rise at his time and place. It is a com- 
mercial result, enforced by the operation of a well-known commer- 
cial principle, to wit, competition in trade. 

But, as the interests of American agricultural labor can not be 
separated from those of American agricultural capital, and as the 
value of each is determined by the prices which their joint products 
are able to command in the market, it matters little which of these 
three things, the labor, or the capital, or their products, is under 
consideration, for the purpose now in view. The inquiry regard- 
ing each leads to the same end. Everybody knows how quick 
the farming interests feel the benefits of a new manufactory, or a 
new manufacturing village or town, that has sprung up in the midst 
of them, under a protective system. The farms instantly rise in 
value; some of them, in the neighborhood, are turned into gardens, 
the most profitable species of husbandry ; a new and lively market 
is opened for agricultural products ; agricultural labor is in greater 
demand, and better paid ; its products command a higher price ; 
and in this way, the increase of manufacturing establishments over 
the face of the country, under the fostering care of the same sys- 
tem, diffuses the same benefits over the agricultural interests of the 
whole land. The operation is simple, and may easily be explained. 
In the first place, the market is brought home to the door of agri- 
culture, instead of being remote in a foreign land. Next, the wants 
supplied, and the profits made, by the sale of agricultural products, 
are supplied and made at home, and the capital, on both sides, is 
in the country, stays here, is used here, and by being turned over 
and over again, in different hands, to different productive ends, is 
the cause of ceaseless and cumulative wealth among all parties; 
whereas, if the same wants had been supplied from abroad, this 
capital would have gone abroad, and been lost to the countrv ^or 



ON THE INTERESTS OF AGRICULTURE. 431 

ever. In all these transactions, and as a consequence, besides the 
benefits to the agricultural interests, and besides the activity and 
profit which they afford to every species of business connected with 
them — and it extends to all kinds of business — there are constantly 
growing up in the country, those great interests, with increasing 
amounts of capital, which, having been first the cause of these wide- 
spread and universal benefits, are the perpetual nurturers of the 
same, imparting benefits to all, and receiving benefits from all. It 
is the creation of a new and coundess family of interests, allied to 
each other, and all profiting by the active operations of which they, 
in such connexion, and by such reciprocal influences, are the cause. 
The country and all parties are enriched. Thirdly, it increases 
the diversity of labor, brings new customers to every vocation, and 
makes each more profitable by diminishing relatively the number 
engaged in it. Fourthly, one of the chief benefits of such a system 
to agriculture, is, that it appropriates to itself thereby, what would 
otherwise be expended in the cost of transportation of its products 
to a foreign market, by having a home market. The practical oper- 
ation of a protective system, for the increase of prices of agricultural 
products, may be thus explained : All agricultural products are 
comparatively gross and heavy, and consequently more expensive 
in being carried to a remote market. Suppose the cost of trans- 
portation from the remote west to the eastern market be 100 per 
cent. In other words, that the products are only worth half as 
much in the place where they are grown, as in the place where 
they are consumed. Add as much more for the expense of deliv- 
ery in a foreign market, and the price to the producer is reduced 
to one third of the price at the place of destination. But bring the 
market half way toward the producer, and the price is raised one 
third. Bring it to his door, and his price is tripled. This is the 
principle of Protection, though these may not be the exact measures 
of its operation in the supposed case. By encouraging and protecting 
domestic manufactures, the market is brought home, and the expense 
of transportation both ways is saved. Farther : All who work at 
manufactures and trades established by a protective policy, are 
withdrawn from agricultural pursuits, and give to the residue em- 
ployed in agriculture better chances for a ready market and high 
prices. The multiplication of useful crafts and vocations contrib- 
utes to the profit of each, as well as to national wealth. A home 
market is more steady and more secure, as well as better for prices. 
And the money paid for products of domestic manufacture, instead 



432 THE EFFECTS OF A PROTECTIVE SYSTEM 

of going abroad, and thus innpoverishing the nation, stays at home 
and enriches it. 

But the following story, alleged as veritable fact, is yet more 
pertinent, and more forcible, in the instruction it affords, on this 
point : A farmer in Illinois wrote a letter to his friend in the east, 
in 1842, complaining that he could get only 31 cents a bushel for 
his wheat, 25 cents for beans, 10 cents for corn, 1^ cents a pound 
for beef and pork, 2J cents a pound for tobacco, &c., stating that 
he had to pay^t?e dollars^ or which is the same thing, 16 bushels of 
wheat, or 20 bushels of beans, or 26 bushels of corn, or 300 pounds 
of pork or beef, or 200 pounds of tobacco, per yard for British 
broadcloth to make him a coat. The cost of this yard of cloth at 
the manufactories in England, was probably about three dollars, or 
three bushels of wheat, as usually sold in the market there. That 
is, the producer in England received for the cloth one fifth of what 
was charged to the farmer in Illinois. Who got the difference ? 
If the manufacturer had been in Illinois, or anywhere in this coun- 
try, the farmer might have got his yard of cloth by a greatly less 
quantity of his own products, and the manufacturer would have made 
a market for the farmer's beans, corn, pork, beef, &c., at a good 
price. This is the true operation of the protective system on agri- 
culture and other interests of the country — especially on those of 
agriculture. No others are benefited so much by it ; and no others 
are so much injured for want of it. It was proved by a report 
made to the 28th Congress, house document No. 420, 1st session, 
that, while the prices of a few agricultural products were slightly 
depressed, under the first two years' operation of the tariff of 1842, 
by those accidents to which such products are ever liable from va- 
riations in the seasons and other transient causes, there was a gen- 
eral rise of prices, the average of which, in a majority of all the 
cases, was 25 per cent. 

Not to overlook or depreciate the benefit of a protective system 
in raising the prices of agricultural products and labor, in the long 
run, nevertheless, its effect in sustaining such prices against the de- 
pressing influence of the low-priced labor of foreign parts, is alto- 
gether the most important. The people of the United States should 
not be deceived by the transient effect in raising the prices of Amer- 
ican breadstuffs, in consequence of the short crops in Europe, in 
1845 and 1846. This state of things was extraordinary, and the 
moment crops are abundant again in that quarter of the world, or 
even tolerable, the reaction in reducing the prices of American 



ON THE INTERESTS OP AGRICULTURE. 433 

breadstuiFs, will be beyond all precedent, if the seasons should be 
equally favorable here, inasmuch as American farmers will n:>turally 
be tempted, under this encouragement of high prices of breadstuffs, 
to turn their attention more to their production, the result of which, 
in the case supposed, will be large surpluses without demand. 
Neither American agricultural labor, nor labor of any other kind, 
can stand up against the low-priced labor of Europe, on a Free- 
Trade basis, all other things being equal. 

According to the annual report of the secretary of the treasury 
for 1845, our average annual imports of woollen fabrics, for the 
twenty-six previous years, were upward of ten millions of dollars 
in value, half of which was an agricultural product — wool. The 
secretary estimated, that, by reducing the duty from 40 per cent., 
as it stood in the tariff of 1842, to 30 per cent, for the tariff of 
1846, the importations of this species of merchandise would be 
increased two millions of dollars a year. It is evident, however, 
that the secretary's estimate gf the increase of imports was by far 
too low for an augmentation of the revenue, which was his declared 
object. The reduction of duty is 25 per cent. To make up, 
therefore, for the abatement of 25 per cent, of the duties on ten 
millions of imports and upward, there must be an increase of im- 
ports of at least five millions, instead of two. Not knowing what 
amount of increase of revenue was aimed at, it is impossible to say 
what other increase of imports would be required. Say, however, 
two millions and a half; which would make the entire increase of 
imports seven millions and a half. Half of this, or three millions 
and three quarters, would be an import of w^ool ; in other words, 
it would involve the transfer of the raising of, and the market for, 
$3,750,000 worth of wool from American farmers to British and 
other foreign producers of this article — not to speak of the wrong 
done to other kinds of American labor that is entided to be em- 
ployed in the manufacture of this seven and a half millions worth 
of goods ; and not to speak of the general depression of prices in 
this and other American agricultural products, by reason of this 
increase of imports. 

The same with iron. For the fiscal year of 1845, the aggregate 
value of the imports of this article and its manufactures, as stated 
in the report of the secretary of the treasury, was $9,043,396. He 
proposed to reduce the duty from 75 per cent, under the tariff of 
1842, to 30 per cemt., as it was fixed in the tariff of 1846 ; and 
thereby to obtain an additional importation of $1,185,000, as he 
28 



4:84 THE EFFECTS OF A PROTECTIVE SYSTEM 

estimated. But here, again, is the same mistake in the estimate, 
as in the case of the woollen goods, the object of the reduction of 
duties being to increase the revenue. The reduction is from 75 per 
cent, to 30 ; that is, more than 50 per cent, abatement of duties on 
a given amount of imports ; and the imports of the previous year 
having been $9,043,396, therefore, to obtain an equal amount of 
revenue by such a reduction of duties, there would be required an 
import of at least $20,000,000. To increase the revenue, the im- 
portations must be more than doubled. But it has been proved, 
that at least four fifths of the value of iron and its manufactured 
products, consist in products of agriculture which enter into them. 
Consequently, if the design of this measure should be realized, the 
farmers of the United States would be deprived of a market for 
their produce, to the amount at least of eight millions of dollars, in 
the case of this single article. To say nothing of the effect of such 
a cause on the prices of agricultural products, to depress them — 
which would be the natural and unavoidable consequence — this 
positive loss of market is no trifle. 

By reducing the duties on coal from 67 per cent., as it was un- 
der the act of 1842, to 30 under the act of 1846, the secretary 
estimated an increase of imports of this article in the sum of 
$5,150,000. All this, of course, is a transfer of so much business, 
and of so much labor of one kind or another, from Americans 
to foreigners ; and one of the worst features of it is the draught which 
it must make on the money of the country. To show how farmers 
are interested in this large and important item of the secretary's 
public economy, and how they must be affected in its practical op- 
eration, it is only necessary to refer to, and unnecessary to repeat 
here, the statistics on this subject before cited from the Hon. Mr. 
Ramsey, of Pennsylvania. It is evident enough, that such an ad- 
ditional importation of foreign coal, could not fail to produce the 
most disastrous effects on all Americans — and they are scores of 
thousands — engaged in this business; and the farmers would not 
be the smallest class of sufferers. 

These three items of wool, iron, and coal, though relatively of 
greater importance than most others, are but the beginning of the 
long list of articles on which this new policy — not, indeed, for the 
first time heard of, but for the first time reduced to experiment in 
the United States — is brought to bear with the same effect and 
result, and in which, of course, all the agricultural interests of 
the country are deeply concerned. There is not a class of man 



I 



ON THE INTERESTS OF AGRICULTURE. 435 

ufacturers, or of mechanics, or of tradesmen, or of artists, or of any 
of the persons engaged in the ahnost countless pursuits of life, 
other than that of agriculture, which the farmers of the country do 
not or ought not chiefly to supply with food ; and none of all these 
which they do not or ought not, to a very great extent, to supply 
with clothing. It is their natural, social, political right, in prefer- 
ence to the claims of foreigners to do the same things. It is their 
natural right, because they are in places contiguous ; it is their 
social right, because they are neighbors ; and it is their political 
right, because they and all these parties are members of the same 
political commonwealth. And yet, it was openly proposed by the 
secretary of the treasury of the United States, in his project of a 
public policy, established by the tariff of 1846, in addition to what 
is noticed above, to increase the imports of boots and shoes, 
$45,000 ; of ready-made clothing, $200,000 ; of blacksmith's 
work, $200,000; of hats, $110,000; of leather, $100,000; of 
glass, $100,000 ; of paper, $150,000 ; of hemp, cordage, &c., 
$275,000; of pins, $50,000; of salt, $1,000,000; of sugar, 
$630,000 ; of wool, unmanufactured, $200,000 ; of potatoes, 
$150,000, &c., &c. And many of these estimates are as much 
below what would be required for the necessary revenue, under 
the reduction of duties fixed by the tariff of 1846, as those given 
for woollen goods, iron, and coal, as above noticed. So much 
business, and all the profits thereof, it is proposed, by an American 
government, to take out of the hands of the American people, and 
give to foreigners. And Americans, by being thus forced to buy what 
they could produce, and wish to produce, and the production of 
which is necessary to their welfare and happiness, are forced to 
bear the immense system of foreign taxation on all these imports, 
at the same time that they. are impoverished for want of the work. 

But to show yet farther how farmers are affected by this policy, 
we shall avail ourselves of the following extract from a speech of 
the Hon. Andrew Stewart, of Pennsylvania, delivered in Congress, 
May 27, 1846, in part a repetition of what we have already given, 
but in a different form, and well put : — 

" With all the protection we now enjoy" [under the tariff of 
1842], said Mr. Stewart, " Great Britain sends into this country 
eight dollars' worth of her agricultural productions to one dollars 
worth of all our agricultural productions, save cotton and tobacco, 
that she takes from us. I assert, and can prove, that more than 
half the value of all the British merchandise imported into this 



436 THE EFFECTS OF A PROTECTIVE SYSTEM 

country, consists of agricultural products ^ changed in form, con- 
verted and manufactured into goods. Take down all the articles 
in a store, one after another ; estimate the value of the raw material, 
the bread and meat, and other agricultural products which have 
entered into their fabrication ; and it will be found, that one half 
and more of their value consists of the productions of the soil — 
agricultural produce in its strictest sense. By reference to Mr. Walk- 
er's report, it will be seen, that, for twelve years back, we have im- 
ported from Great Britain and her dependencies annually, fifty-nine 
and a half millions of dollars worth of goods — call it fifty millions — 
while she took of all our agricultural products, save cotton and to- 
bacco, less than two and a half miWions of dollars worth. Thus, then, 
assuming one half the value of her goods to be agricultural, it gives 
us $25,000,000 of her agricultural produce to $2,500,000 of ours 
taken by her, which is just ten to one ; to avoid cavil, put it at eight 
to one. . . We have imported yearly, for twenty-six years — so 
says Mr. Walker's report — more than ten millions of dollars worth 
of woollen goods. Last year we imported $10,666,176 worth. 
Now, one half and more of this cloth was made up of wool, the 
product of labor and agriculture. The general estimate is, that the 
wool alone is half. The universal custom among farmers, when 
they had their wool manufactured on shares, was to give the man- 
ufacturer half the cloth. Thus we import, and our people have 
to pay {ox, five millions of dollars worth of foreign wool, mostly 
the product of sheep-feeding on the grass and grain of Great 
Britain, to the prejudice of the market for our own wool ; and this 
is the policy gentlemen recommend to our farmers! Yes, sir; 
and not satisfied with^ve millions, they wish to increase it to ten 
millions a year for foreign wool. Will gendemen deny this? 
They dare not. They supported Mr. Walker's bill, reducing the 
duties on woollens nearly one half, with a view to increase the rev- 
enue. Of course the imports must be doubled, making the import, 
of cloth twenty millions instead of ten, and of wool ten instead of 
five millions of dollars per annum. . . What is true of cloth is 
equally true of everything else. Take a hat, a pair of shoes, a 
yard of silk or lace, analyze it, resolve it into its constituent ele- 
ments, and you will find that the raw material and the substance 
of labor, and other agricultural products, constitute more than one 
half of its entire value. The pauper-labor of Europe employed 
in manufacturing silk and lace, gets what it eats, no more ; and this 
is what you pay for, when you purchase their goods. The article 



ON THE INTERESTS OF AGRICULTURE. 437 

of iron is a stronger case. Last year, according to Mr. Walker's 
report, we imported $9,043,396 worth of foreign iron and its man- 
ufactures, mostly from Great 'BriiSiin, four Jl/ths of the value of 
which, as every practical man knows, consist of agricultural prod- 
uce — nothing else. What gives its value? The labor of horses, 
oxen, mules, and men. And what sustained this labor, but corn, 
oats, hay, and straw for the one, and bread, meat, and vegetables 
of every kind, for the other? These agricultural products are 
purchased and consumed, and make up nearly the whole price of 
the iron, which the manufacturer receives and pays over to the 
farmers again and again, as often as the process is repeated. Is not 
iron made in England of the same materials that it is made of here? 
Certainly. Then is not four fift Its of the value of British iron made 
up of British agricultural produce? And if we purchase nine mil- 
lions of dollars worth of British iron a year, do we not pay six or 
seven millions of this sum for the produce of British farmers — 
grain, hay, grass, bread, meat, and other provisions for man and 
beast — sent here for sale in the form of iron ? . . Mr. Secretary 
Walker informs us that the present duty on iron is 75 per cent., 
which he proposes to reduce lo 30 per cent, [which is the duty of 
the tariff of 1846], to increase the revenue. To do this, must he 
not then double [more than double] the imports of iron ? Surely 
he must. Then we must add ten or twelve millions a year to our 
present imports of iron, and of course destroy that amount of our 
domestic supply to make room for it. Thus at a blow, in the sin- 
gle article of iron, this bill is intended to destroy the American 
market for at least eight millions of dollars worth of domestic 
agricultural produce, to be supplied from abroad." 

The following extract from Adam Smith will show that he was 
aware of this great truth in public economy, though it is singular 
that it should require three fourths of a century for its full devel- 
opment : " A piece of fine cloth which weighs only eight pounds, 
contains in it the price, not only of eight pounds weight of wool, 
but sometimes of several thousand weight of corn, the maintenance 
of the different working people, and of their immediate employers. 
The corn which could with difficulty be carried abroad in its own 
shape, is in this manner virtually exported in that of the complete 
manufacture, and may easily be sent to the remotest corners of the 
world. In this manner have grown up naturally, and as it were of 
their own accord, the manufactures of Leeds, Halifax, Sheffield, 
Birmingham, and Woolverhampton. [Now may be added Man- 



438 THE EFFECTS OF A PROTECTIVE SYSTEM 

Chester, Paisley, and many other manufacturing towns of England 
and Scotland.] In the modern history of Europe, their extension 
and improvement have generally been posterior to those which 
were the oiFspring of foreign commerce. England was noted for 
the manufacture of fine cloths made of Spanish w^ool more than a 
century before any of those which now flourish in the places 
above mentioned were fit for foreign sale. The extension and im- 
provement of these last could not take place but in consequence 
of the extension and improvement of agriculture, the last and 
greatest effect of foreign commerce, and of the manufactures im- 
mediately introduced by it." 

The English Free-Traders have overshot the mark, and given 
advice to all the world, which was designed for home consump- 
tion. They would have been more wise, if they had held all their 
debates with domestic opponents, behind closed doors. For ex 
ample, in the " Examiner," where we find Mr. Brown's letter, we 
also find an article the next month, of which the following is an 
extract : " Manchester, Birmingham, and Leeds, are the great 
merchants who buy the duke of Buckingham's wheat [a metaphor, 
meaning any Englishman's wheat] at o5s. per quarter, pay a bounty 
of 2O5. with it [making 75^. per quarter], and then sell it abroad at 
355. per quarter. In fact, it is the foreigner who pays the farm la- 
borer and the landlord's rent; and if the Chinamen, and the Yan 
kees, and the Germans, were to stop payment, what would become 
of mortgages and daughters' settlements." 

It can not be denied, tliat this is a candid disclosure ; and if 
" the fore}g7ier,^^ especially " the Yankees," are not instructed by 
it, they must have lost their reputed sharpness. Is not this cool, 
not to say impudent, for an English Free-Trader to insult the world 
with such a notice ? It is the '•'•Yankees,^^ then, who redeem their 
mortgages, and furnish the daughters of the English landlords with 
settlements, by consuming their agricultural products, in the form 
of manufactured goods ! This, doubtless, is the exact truth. Some, 
perhaps, will be puzzled to discern what this writer means by pur- 
chasing "the duke of Buckingham's wheat" at a cost of 75.?. per 
quarter, and selling it at 35.9. It is simply this: It goes into the 
mouth, " laboratory," of Mr. Brown's " wonderful intellectual ma- 
chine, man," the British operative, " and gives him the pliysical 
power, aided by steam, of converting it into broadcloth, calico, 
hardware," &c. This " physical power," imparted by the bread, 
is such a multiplication of the power of its cause, that a moiety 



ON THE INTERESTS OF AGRICULTURE. 439 

hereof is worth more than the whole cost of the power that pro- 
duced it ; and this is the way in which they buy " the duke of 
Buckingham's wheat" at 755. per quarter, and sell it at 355. 

That this great and important doctrine, viz., that agricultural 
products and labor incorjporate themselves with those ofmanvfacture, 
constitute the principal part of them, and go forth in this disguise to 
market, at home and abroad, wherever the articles of manufacture 
are in request, is well understood in England, appears to be evident 
enough ; though all British economists, for reasons that appear else- 
where in this work, have taken good care to keep it out of sight.* 
It only requires, that it should be understood in the United States, 
and the agriculturists, the farmers, of this country, will then see 
where their true interest lies. It lies in a protective system, that 
shall secure a home market for their products. Nature, sound pol- 
icy, and Providence, seem to have decided, that agriculture and 
manufactures, in the United States — anywhere, indeed — should 
support each other, and that they together should keep commerce 
in motion, to distribute their products over the face of the earth ; 
for the products of manufacture are but the products of agriculture 

* It seems, too, that the secretary of the treasury of the United States, in his an- 
nual report for December, 1847, has also endeavored to kepp this out of sight, by a 
most extraordinary, even audacious statement. He says, that "the average ex- 
ports of breadstufts and provisions were much larger in the years of low, compared 
with high duties, the. tables of the treasury clearly prove." The veracity of this 
statement is most unfavorably tested by the following extracts from -these very " ta- 
bles of the treasury," as officially certified and published by himself. We have 
added a third column, to show the amount of agricultural products and labor im- 
ported from the same quarter, for the same years, rating them at half the cost of 
the imports, as above shown not to be too large. This third column is at the same 
time an illustration and a proof of the doctrine of this chapter, as stated in the text 
above in italics : — 

Amount of imports 
Years. from Great Britain. 

Under high tariff— 1829 $27,000,000 

1830 26,000,000 

1831 47,000,000 

1832 42,000,000 



Total 142,000,000 

Average of 4 years 35,500,000 



Under low tariff - 1835 66,000,000 

1836 86,000,000 

1837 52,000,000 

1838 49,000,000 



Total 253,000,000 

Average of 4 years 63,250,000 



Amount breadstuffa 
exported to Great 


Amt. agricult'l prod- 
ucts and labor im- 


Britain from tlie 


ported in goods. 


United States. 


being )4 of coats. 


$1,777,124 


$13,500,000 


1,606,738 


13,000,000 


5,578,592 


23,500,000 


541,787 


21,000,000 


9,504,241 


71,000,000 


2,376,060 


17,750,000 


28,917 


33,000,000 


1,684 


43,000,000 


1,402 


26,000,000 


62,626 


24,500,000 


94,629 


126,500,000 


23,657 


31,625,000 



440 THE EFFECTS OF A PROTECTIVE SYSTEM 

in disguise, as above shown, and this is the only way in which the 
prices of American agricultural labor can be sustained at home and 
abroad. Let American agriculture find a market in American man- 
ufactures, by an adequate system of Protection, and it has the mar- 
ket of the world at its feet, which otherwise it could never have — 
nor the smallest part of it — at remunerating prices. It will be of 
no use for American farmers to raise corn for Europe and other 
foreign parts, when the return of favorable seasons shall bless them 
with good crops again, so long as labor is lower there than they are 
willing to work for. They must soon get sick of that. Immutable 
laws have decided against it. But there is not a single manufac- 
turing or mechanic art, if adequately protected, in which American 
skill can not equal that of Europeans, in a course of time. And if 
Americans can equal them in skill, they can equal them in all things 
else, and gradually obtain their proper share of the market of the 
world ; for European, and all foreign nations, labor under disadvan- 
tages, inherent in their institutions, from which the people of the 
United States are exempt. Even under the slender and inadequate 
protection extended to American arts heretofore, Americans, in some 
things, have entered into competition over the wide world, with the 
boasting mistress of the arts, that boasts of being mistress of the seas, 
and were rapidly gaining upon her under the tariiFof 1842. That 
is conclusive evidence of what can be done. In this way, and in 
no other, can the prices of American labor be sustained. That de- 
voted to agriculture would be kept up, because the policy supposes 
that it would, as near as convenient, have in view only the supply 
of the home market, which is always best, most uniform, and most 
secure. The prices of manufacturing and mechanical labor would 
be kept up, first, because experience proves it ; next, because it 
could be afforded ; and thirdly, because labor would occupy a po- 
sition to demand it. And lastly, the prices of manufactured articles 
would be kept down, and reduced still lower, first, because experi- 
ence proves that, too, as shown in these pages ; and next, because 
they imist be reduced, in order to compete with the manufactured 
products of Europe. It is in a home market only, that American 
agricultural labor can ever be secure of its rew^ard ; and the expe- 
rience of Great Britain proves, as shown in this chapter — all expe- 
rience proves — that the market for agricultural products in a great 
manufacturing system, like that of England, and like that which 
might be erected in the United States, under an adequate system 
of Protection, is indefinite, boundless. 



ON THE INTERESTS OF COMMERCE AND NAVIGATION. 441 



CHAPTER XXVIII. 

THE EFFECTS OF A PROTECTIVE SYSTEM ON THE INTERESTS 
OF COMMERCE AND NAVIGATION. 

Departments of Labor interested in Navigation. — Ship-Biiilders. Mechanics, and Sailors, 
all require Protection. — Ship-Owners require it — What would be the Effects of abol- 
ishing: our Navigation Laws. — Navigation and Commerce two Interests. — Statistical 
Proofs of the different Effects of Free Trade and Protection on these two Interests. — 
The Position and Interests of Importing-Merchants hostile to the Interests of the Coun- 
try. — Statistics continued, with a Variety of Facts, mixed with Doctrine. — Commercial 
and Reciprocity Treaties all bad, as proved by Experience. — Reciprocity necessarily em- 
bodies the Principles of Free Trade — Foreign Commerce, under a Protective System, 
may be made to supply all the Wants of Government, without taxing the People. 

The interests of navigation proper, as the instrument of com- 
merce, comprehend a very large department of labor — the labor 
of constructing the craft, of producing, collecting, and forming the 
materials, and the adventurous tasks of those who use and guide 
these instruments of commerce on the bosom of the deep. These 
are distinct branches of labor, employing a large portion of every 
commercial community. The materials of ship-building nearly all 
come originally, either from the forest, or from the culture of the 
soil, or from the mines, and consist chiefly of timber, hemp, iron, 
copper, &c. Sundry manufactures and a variety of the mechanic 
arts enter into the formation of these materials, and are required to 
adapt them to their ultimate design and use. It will be found that 
all these materials, and all the manufacturing and mechanic arts 
thus employed, as much require protection in their progress, from 
beginning to end, as anything else ; inasmuch as there is no kind 
of labor put in requisition in preparing the materials for ship-build- 
ing, and in the construction of ships, which does not have to en- 
counter the antagonism of low-priced foreign labor, which would 
impair its rights, and drive it from the field, without the shield of 
protection. Nor does this prove, as Free Trade continually a.s- 
serts, that ships would cost less without a protective system. For 
the same great principle applies here as to all other branches of 
American labor, viz., protect it, and although its own prices, as 
labor, are higher, yet its products of manufacture and art will be 
cheaper than the imported products of foreign low-priced labor, if 
we are dependent upon them. This has been abundantly proved 



442 THE EFFECTS OF A PROTECTIVE SYSTEM 

in another chapter, and in apphcation to the most important mate- 
rials and parts of ship-building, limber, iron, hemp, cordage, cop- 
per, &c. 

It is true, indeed, that ships can be and are built on the shores 
of the Baltic at a cost very much less than in the United States, 
and it might seem, at a first view, to be for the interest of Ameri- 
can ship-owners and merchants engaged in navigation to order and 
import their ships already built and equipped. So it might seem 
to be for their interest to man them from abroad, inasmuch as for- 
eign sailors do not get but about half the wages of American sailors. 
We say it might seem, to be for their interest. But the advocates 
of Free Trade always fall into a fatal error, and others are in dan- 
ger of being drawn along with them, by assuming that American 
consumers of the products of foreign low-priced labor can profit by 
it; whereas, the moment we allow ourselves to be dependent, we 
find everything costs more than when we are independent under a 
protective system. This has been proved in a former part of this 
work. In the same manner, if American ship-owners and mer- 
chants were permitted to buy and man their ships from abroad, and 
to trade in foreign bottoms, till American shipyards should be closed 
for want of work, as they doubtless would be, the same consequen- 
ces would naturally, not to say necessarily, follow, as in all other 
cases to which Free Trade leads: first, the employment of Amer- 
ican labor, and the use of American arts, are suppressed ; next, 
these being suppressed, and foreign labor and arts having the mo- 
nopoly, and being in great demand, they could command their own 
prices ; thirdly, and consequently, it would instantly be found, in 
all such cases, as always before in all other similar cases, that prices 
would rise, and the same tilings would cost more than at home un- 
der a system of protection. 

But the navigation-laws of the United States very properly for- 
bid such a course to American ship-owners and merchants, and it 
is therefore out of the question. They are forced to build and buy 
at home ; and it was for purposes of protection that these laws 
were enacted. They are among the strongest statutes ever foisted 
into a protective code, and are universally conceded to be impor- 
tant and indispensable. But for these laws, there would scarcely 
be an American bottom entering our ports from foreign parts, and 
our coasting-trade itself would be monopolized by foreign craft. 
For how could our own craft, which costs so much more, and our 
own sailors whose wages are so much higher than those of foreign 



ON THE INTERESTS OF COMMERCE AND NAVIGATION. 443 

sailors, compete with such an opposition, on the basis of Free 
Trade ? It would be impossible. And it is seldom considered 
that Free Trade strikes at the root, at the foundation, of our entire 
system of navigation, and that it would be totally destructive of all 
its interests — of all the interests of ship-builders, of all the provi- 
ders of materials for ship-building, of all the manufacturers, me- 
chanics, and artists, engaged in the various parts of work required 
for building and equipping ships, and of all the American sailors 
and navigators employed in our commercial marine. Not one of 
them could subsist in the reign of Free Trade applied to naviga- 
tion and to the building of navigating craft, except as their wages 
should be reduced to the level of the wages of foreigners engaged 
in the same employments ; which, indeed, would be the unavoida- 
ble result. In other words, foreigners having once monopolized 
the business, in all its branches, would keep it at their own prices. 

That those engaged in the pursuits connected with navigation, 
and in navigation itself, should expect to escape these consequences 
of Free Trade, as they bear on themselves, is a delusive hope, if 
Free Trade is to have full scope : and why should it not, if the 
doctrine be sound ? Such immunity would be a partiality which 
other classes of the community would hardly tolerate. All must 
stand under Protection, or fall under Free Trade, together. The 
theory of Free Trade knows no distinction or exception of pur- 
suits. 

The interests of navigation, as must be seen, are distinct from 
those of commerce, though both are often combined in the same 
parties. Navigation is the instrument or agent of commerce, and 
the carrying-trade is the source of its profits. Apart from the in- 
fluence of extraordinary events, such as the scarcity of provisions 
in Europe and other foreign parts, as in 1846 and 1847,* one of 
the surest rules of determining the effects of a protective system or 
the want of it, on the interests of navigation, is the comparative 
amount of tonnage employed in the carrying-trade, under these 
two states of things, respectively. It may, indeed, be called an 
infallible rule. Look, then, at the following facts ; — 

It appears, by the United States treasury documents, that, in 

1840, when Free Trade had brought down the country to the low- 

* The secretary of the treasury, in his annual report of December 9, 1847, has 
made an unjustifiable use of the increase of tonnage required to transport Ameri- 
can bread-stuffs to Europe, in consequence of short crops in that quarter in l846-'7. 
He has also forced results on this point from other assumed data, which are incon- 
sistent with his own official tables. 



444 THE EFFECTS OF A PROTECTIVE SYSTEM 

est depths of commercial ruin, still running down, the total tonnage 
of the United States amounted to 2,180,764 tons ; in 1841, to 
2,130,744 ; and in 1842, to 2,092,300 : showing a falling off in 
three years, before the passage of the tariff of 1842, of 88,464 
tons, instead of a gradual increase, as it ought to have been. Af- 
ter the enactment of the tariff of 1842, the tonnage rose, in 1843, 
to 2,158,601 tons ; in 1844, to 2,280,095 ; and in 1845, to 
2,417,002 : being a gain in three years, under the tariff of 1842, 
of 258,401 tons. The tonnage built in the United States, in 1845, 
was greater by 28,000 tons than the average of the three prece- 
ding years, showing an increasing demand. 

From the same official records it appears that the tonnage which 
entered the ports of the United States, and cleared, in 1841, was 
4,639,458 tons ; and in 1842, when the duties were down to the 
lowest ebb, 4,519,841 tons. But in 1844, two years after the 
passage of the tariff of 1842, it had risen to 5,812,168 ; and in 
1845, to 5,930,303. These figures show a falling off from J841 
to 1842, when duties were lowest, of 219,617 tons ; and an in- 
crease in one year, from 1844 to 1845, under what are called high 
duties, of 118,135 tons. The tonnage which entered and cleared 
in 1845, was 1,410,462 tons more than in 1842, before the tariff 
of that year, dated August 30, had begun to take effect. These, 
as can not be denied, are strong facts, and directly to the point. 
They are, indeed, conclusive. 

The explanation of this result is, that a Free-Trade system in- 
creases the amount of manufactured imports, which are not only 
of great and ruinous cost to the country, by depriving home labor 
of employment, and drawing away money, but which employ the 
least amount of tonnage, and thus injure the interests of navigation. 
Free Trade also diminishes those imports — such as raw materials 
for home manufacture — which employ the greatest amount of ton- 
nage, and benefit navigation ; whereas, a protective system pro- 
duces a directly contrary effect in all these particulars, viz. : dimin- 
ishes imports of manufactured products, which are of little benefit 
to navigation ; increases those imports which make the profit of 
navigation, and give employment and profit to home labor ; and 
farther employs and encourages home labor, by securing to it the 
manufacture of those articles the import of which is discouraged by 
protection. 

There was perhaps never presented a more condensed, and a 
the same time full, view of this argument, than that which was ex- 



ON THE INTERESTS OF COMMERCE AND NAVIGATION. 445 

hibited by the Hon. Daniel Webster, in his speech delivered in the 
senate of the United States, July 25th and 27th, 1846, when the 
tariff of 1846 was under debate ; nor can we do better than copy 
his remarks and tables as a part of our own argument on this point. 
They will be found in the note below.* 

In further execution of the plan of this chapter, it is proposed 
here to consider only that portion of our commerce which is car- 
ried on between the United States and foreign parts, and to leave 

* " Now, sir, 1 proceed to say something upon the influence, the necessary influ- 
ence, which this proposed change in our system will exercise, upon the commerce 
and navigation of the country. I shall do that by exhibiting a series of tables which 
will speak for themselves ; which I know have been drawn up with great accuracy, 
founded on the last official communication of the secretary of the treasury, so far 
as revenue is concerned, and estimates regarding the value of freights, collected 
from the first mercantile sources in the country. Now, as a general remark on 
these various papers, and, which they fully confirm, I wish to say, what would 
naturally be expected to be true, that for some years past, since the favor and pro- 
tection of the government were given to the internal manufactures of the country, 
the foreign trade of the country has conformed to that state of things ; and a 
change in the business of navigation, and commerce, and freight, consequent upon 
these internal changes, is quite as striking as these internal changes themselves; 
and the great element of that change consists in a change in the nature of the 
main articles of import, showing a diminution of articles of manufactured charac- 
ter, and a vast augmentation of articles of the character of raw material, or bulky 
articles. The consequence of which, as will be seen by the tables I am about to 
exhibit, is a large actual increase of the earnings of the shipping interest on im- 
ports. Because all know that freight is proportioned to the bulk of the article, 
and not to its cost. It is the space that the commodity fills in the ship, and not 
its value, which regulates the rate of freight. Therefore it is, that though the im- 
portations may be greatly augmented in value, from being composed of manufac- 
tured articles chiefly, yet the freight is not increased in the same ratio, but may be 
diminished. That fact is notorious to all those acquainted with the commerce of 
the country. It is perfectly understood by all the ship-owners of the United States; 
and that fact is of itself sufficient to account for the great and important truth, that 
the navigation interest of the United States, the ship-owners, to a man, oppose this 
change of system; because the existing system gives more employment to this 
navigation, than the system now attempted to be substituted for it. 

"Now, sir, a heavy mass or amount, in value, of manufactured articles, as is 
well known, comes from France and England. Our more various commodi- 
ties and our importations of heavy articles, come from round the capes, and 
from Brazil, and the north of Europe. The tables which I propose to exhibit to 
the senate, will show the amount of these, respectively, and the change produced 
in them within the last five years. Now, sir, let me premise, that articles of im- 
port into the United States are properly divisible into three classes. First, those 
articles which come here manufactured, and fit for use or for sale ; secondly, arti- 
cles not manufactured, brought here for consumption as imported, without any 
manufacture after they arrive; thirdly, those articles which are in the nature of 
raw materials, and are brought here to undergo a process of manufacture. Let us, 
then, see the amount of freight derived from these three respective classes of im- 
ports : — 



446 



THE EFFECTS OF A PROTECTIVE SYSTEM 



the coasting business to be noticed with the home trade, of which 
it is a part. It might seem at first sight, that a pubHc pohcy which 

Net Imports, in 1845, of Foreign Manufactured Articles, 

Articles. Value in Dolls. Duties in Dolls. Freights in D oils. 

Silk 10,840,000 2,968,000 36,100 

Wool 10,750,000 3,755,000 80,625 

Cotton 13,360,000 4,908,000 133,360 

Flax 4,893,000 1,263,000 48,930 

Iron 4,022,000 1,607,000 120,360 

Railroad Iron 1,000,000 600,000 96,000 

Cigars 1,086,000 305,000 25,000 

Brass and other Metals "3,690,000 688,000 55,500 

Earthern and Glass Ware... 3,122,000 2,087,000 218,540 

Clothing, ready made 1,108,000 449,000 11,080 

Hats and Bonnets 732,000 256,000 10,980 

Leather, Boots, and Shoes.... 848,000 242,000 12,720 

Paper 276,000 60,000 4,140 

Cotton Bagging 102,000 56,000 1,530 

Other unenumerated Articles 3,000,000 2.50,000 75,000 

Total 58,829,000 18,494,000 929,865 

Foreign Articles for Consumption as Imported. 

Articles. Value in Dolls. Duties in Dolls. Freights in DoUa 

Coffee...., 5,380,000 Free. 943,580 

Tea 4,809,000 Free. 343,000 

Sugar [proportion of] 2,024,000 1,067,000 375,000 

Wines 1,493,000 1,292,000 111,925 

Spirits 1,09.5,000 1,554,000 109,500 

Fruits and Spices 1,480,000 560,000 124,000 

Molasses [proportion of]... 1,000,000 300,000 280,000 

Salt 883,000 678,000 247,000 

Coal ^ 188,000 130,000 188,000 

Fish 300,000 50,000 30,000 

Beer, Ale, and Porter 90,000 19,000 8,000 

Other unenumerated Articles 1,500,000 89,000 225,000 

Total 20,242,000 5,735,000 2,985,005 

Foreign Articles for Manufacture in the Uvited States. 

Articles. Value in Dolls. Duties in Dolls. Freights in Dolli 

Sugar [proportion of] 2,025,000 1,510,000 562,500 

Molasses [proportion of].... 2,072,000 591,000 450,000 

Iron [proportion of] 2,966,000 1,401,000 415,000 

Steel 750,000 97,000 25,000 

Hides and Furs 4,706,000 332,000 610,000 

Copper and Brass 1,951,000 Free. 140,000 

Mahogany 248,000 40,000 49,600 

Wool 1,667,000 123,000 330,050 

Rags 416,000 27,000 75,000 

Saltpetre 486,000 Free. 245,000 

Hemp 483,000 173,000 78,000 

Indiso 768,000 53,000 15,000 

Dye-Stuffs, &c 294,000 Free. 190,000 



ON THE INTERESTS OF COMMERCE AND NAVIGATION. 447 

is beneficial to navigation is so to commerce ; and for the most 
part, and in the long run, it is, though the evidence is not all of the 

Articles. Value in Dolls. Duties in Dolls. Freights in Dolla 

Bristles 178,000 3,000 4,000 

Camphor 143,000 35,000 3,000 

Dye- Woods 337,000 Free. 50,000 

Linseed 369,000 19,000 205,000 

Raw Silk 710,000 173,000 12,000 

Other unenumerated Articles. 2,000,000 100,000 295,000 

Total 22,569,000 4,677,000 3,754,150 

Recapitulation. 

Value in Dolls. Duties in Dolls. Freights in Dolls. 

Foreign Manufactured Articles... 58,829,000 18,494,000 929,865 

Foreign Articles for Consumption . 20,242,000 5,735,000 2,985,005 
Foreign Articles for Manufacture 

in this Country 22,569,000 4,677,000 3,754,150 

Aggregate.. 101,640,000 28,906,000 7,669,020 

"Now, sir, I have said that changes have taken place in the foreign trade of 
the country since the enlargement of the manufacturing system of the United Slates, 
which were naturally to be expected. And I think it was suggested the other day, 
Ly my friend from Vermont, near me (Mr. Phelps), that a common and great mis- 
take is, that we do not accommodate our legislation to the changing circumstances 
of the country; and that we think that we can go back to where we were years 
ago, without disturbing any interests, except those immediately affected ; yjhereas, 
such is the connexion and cohesion, and so closely are all these interests united, 
that there comes to be a complexity and mutual dependence, and there is no dis- 
turbing one great branch of the system without injury to all the rest. Here is a 
table of our trade with South America, and beyond the capes, with a comparison of 
that trade, in the year 1828 and the present year: — 

Comparison of our Trade with Places beyond the Cape of Good 'Hope, and South 

America. 
Imports, value Domestic Exports, Tons of ship- 
In 1828. in Dolls. value in Dolls, ping employ'd. 

Dutch East Indies 113,000 83,000 1,454 

British East Indies 1,543,000 55,000 2,589 

Manilla 60,000 20,000 829 

China 5,340,000 230,000 9,900 

Buenos Ayres and Montevideo 317,000 94,000 1,363 

Brazils 3,009,000 1,505,000 24,482 

Other South American Ports 1,904,000 1,776,000 8,672 

Total 12,286,000 3,763,000 49,291 

In 1845. 

Dutch East Indies 935,000 98,000 4,900 

British East Indies 1,650,000 338,000 • 10,479 

Manilla 725,000 92,000 6,636 

China 4,931,000 1,110,000 15,035 

Buenos Ayres and Montevideo 1,561,000 640,000 17,300 

Brazils 6,883,000 2,409,000 48,550 

Other South American Ports 8,434,000 2,574,000 19,747 

Total 21,519,000 7,257,000 122,647 

Increase 75 per cent. 90 per cent. 150 per cent, 



448 THE EFFECTS OF A PROTECTIVE SYSTEM 

same class. Nor is the benefit of a foreign commerce to the coun- 
try to be determined by the gross amount of imports and exports, 

**This double increase of tonnage employed over the increase in the value 
of imports, is owing to the present importation of the coarse and bulky articles for 
manufacture, instead of manufactured silk and cotton goods of China, Manilla, 
and Calcutta. 

" To be more particular, we now give a general description of tLe goods im- 
ported from those places in the year 1828, viz. : — 

Manufactured Cotton Goods.. $1,041,000 Teas $1,800,000 

Manufactured Silk Goods. . . . 2,627,000 Wool 18,000 

Indigo [which was imported Coffee 1,700,000 

for export] 1,030,000 Specie 1,000,000 

Hides 1,040,000 Unenumerated Articles 1,096,000 



Sugar 284,000 

Copper, in Pigs and bars 650,000 Total 12,286,000 

In 18-45, viz. :— Linseed $300,000 

Manufactured Cotton Goods. $1,500 Gunny Bags 110,000 

Manufactured Silk Goods 1 50,000 Drugs and Dye-Stuffs 150,000 

Indigo 660,000 Ginger 40,000 

Hides 3,600,000 Cocoa 170,000 

Sugar 419,000 Spices 15,000 

Copper, Pigs and Bars 365,000 Hemp 248,000 

Teas 4,075,000 Specie 1,200,000 

Wool.^ 563,000 Unenumerated Articles 2,381,000 

Coffee 6,600,000 

Saltpetre 500,000 Total 21,519,000 

"It is thus apparent that the increased employment of our tonnage of one hun- 
dred and fifty per cent, in this distant transport, has been from the importation of 
the raw materials for manufacture in our country, and of the increased quantities 
of coffee and teas, and no doubt increased exportation of our domestic products to 
those distant places has been promoted by this increase in imports. Those domes- 
tic products were manufactured cotton and woollen goods, lumber, and articles of 
furniture, provisions of all kinds, naval stores, cotton, tobacco, ice, candles, &c,, &c. 

" I have another table, Mr. President, exhibiting our trade with the north of 
Europe, presenting the same general result, and as we have ceased to import hemp 
to a great extent from Russia, the increase in the tonnage is principally from eX' 
portations : — 

" Comparison of our Trade with the North of Europe, viz, : Russia, Sweden, Ger- 
many, and Holland, showing a falling off in the Imports. 

In the year 1828 $11,214,000 

In the year 1845 4,059,000 



Decrease of 7,155,000 

And an increase in our Domestic Exports of — 

In the year 1828 $5,085,000 

In the year 1845 , 6,346,000 

Increase of 1,261,000 

And an increase in the Tonnage employed of— 

In the year 1828 136,100 tons. 

In the year 1845 1 97,000 tons. 



Increase 60,900 tons. 



GN THK INTERESTS OF COMMERCE Ai\D NAVIGATION. 449 

an}' more than the gross amount of a spendthrift's costs of living 
and income will prove his prosperity, so long as his expenditures 

" This increase is from the transport of our domestic exports to those places. 

" It will be interesting to note some of the articles of import from those places, 
in which that reduction strikingly appears. 

In 1828. In 1845. 

Manufactures of Cotton and Flax $2,190,00.0 $165,500 

Manufactures of Iron and Steel 2,204,000 677,000 

Manufactures of Glass 458,000 128,000 

Manufactures of Leather 330,000 2,100 

Manufacluresof Sail Cloth 345,000 186,000 

Manufactures of Linseed Oil 130,000 13,000 

Manufactures of Cordage 145,000 54,000 

Unmanufactured Hemp 990,000 211,000 

Unmanufactured Flax 37,000 31,000 

Unmanufactured Wool 97,000 31,000 

Unmanufactured Rags None. 12,000 

Total 6,926,000 1,510,000 

*^Thus showing a reduction in the manufactured goods, hemp, &c., imported 
from those countries, of more than three fourths of the whole amount. 

"These facts are certainly of importance in considering the employment of our 
shipping in the transport of raw material, such as cotton, flax, hemp, iron, coal, &c., 
coastwise in our own country, for the manufacture, in our country, of goods which 
have taken the place of the foreign manufactured goods, imported and consumed 
by us, 16 years ago. 

" A very important fact in connexion with this part of the subject is, that this 
distant trade is in our own vessels. It is divided by none. We know that in the trade 
between us and England, about a third of the navigation is in the hands of Eng- 
land. But in the trade with the north of Europe, &c., the trade is on American 
account, and to our advantage ; and to a great extent, also, we pay for the impor- 
tations by domestic products. We do not now hear of any extraordinary amounts 
of specie to meet the demands of this trade, because the productsof our own indus- 
try and our own people, in a manufactured state, are carried out. 

"It is obvious, sir, that for the same reason that the raw material imported for 
the manufacturer pays a large proportion of freight, articles of export of like na- 
ture from our side for the same purpose pay also a large proportion, as everybody 
knows is the case with cotton. And this proves that, in every measure concern- 
ing the interests of navigation, we should consult rather the great and bulky arti- 
cles, than the small, where the value is great and the bulk diminished. 

"Now, be pleased to notice these results. Fifty-eight millions of dollars of man- 
ufactured goods imported, yield less than one million for freight. Twenty-two 
millions of dollars brought in articles to be manufactured here, yield three millions 
and three quarters; being, very nearly, one half of all the freight earned on all 
our imports. Certainly, this is a most important fact, and worthy of all attention. 

"We propose, then, Mr. President, in the first place, to diminish and discourage 
labor and industry at home, by taxing the raw materials which are brought into 
the country for manufacture. We propose, in the second place, to diminish the 
earnings of freight very materially, by diminishing the importation of bulky arti- 
cles, always brought in our own ships. We propose, in the third place, to diminish 
the amount of exports of our own domestic manufactured goods, by refusing to lake 
in exchange for them raw materials, the products of other countries. This is our 
29 



450 THE EFFECTS OF A PROTECTIVE SYSTEM 

are greater than his receipts. The Free-Trade doctrine is, that 
the spendthrift is growing rich. 

But it is no matter to navigation, as a distinct interest, what work 
it is engaged in, so it has work ; or what it carries, if it has enough 
to carry. It might also be said, with a quahfication, that it is no 
matter to importing merchants, for the time being, how much more 
they bring into the country than is carried out, of other commodi- 
ties than money, if they, personally, have time to wind up, and 
get out of harm's way, before the country, as a whole, is compelled 
to settle the balances against it in cash. They may even get rich, 
and retire on princely fortunes, if they retire soon enough, while 
the country is plunged into general bankruptcy, and the masses of 

present policy ! This is our notion of Free Trade ! Surely, surely, Mr. President, 
this enlightened system can not fail to attract the admiration of the world ! 

" Now, sir, one can not say to what extent this change of system may affect the 
navigation of the country, but its tendency is, unquestionably, to cripple and cramp 
the navigating interest. Its tendency is to diminish the demand for tonnage, 
for navigation, for the carrying trade. And I think I might on this occasion, with- 
out impropriety, call the attention of the senator from Maine, farthest from me 
[Mr. Fairfield], a gentleman who here represents a state, if not first, at least 
among the very first, in regard to the amount of its navigation. The ships of 
Maine are found in every quarter. They are round the capes, and in the north 
sea. They bring home these raw materials ; and everything that diminishes the 
consumption of these raw materials in our own country, diminishes the chances of 
employment to every ship-owner in the state of Maine. I will read an extract or 
two, from a letter which I have received on this subject : — 

Baltimoke, 20th July, 1846. 

" ' Sir : I notice that the new tariflf bill has, in its schedule, silk, mahogany, 
hides, brazette wood, logwood, fustic, Rio Hache wood, Lima wood. Sandal wood, 
red cedar, pig copper, nitrate of soda, or the sal soda of Peru, saltpetre, block, and 
all sorts of crude woods, and many drugs of bulk, all more or less dutiable, and tea 
and coffee left free. 

*' 'This is curious Free Trade. 

" ' Tliese are the articles that give our vessels homeward freights, and being 
chiefly gross articles of great bulk, they appeal most strongly to be placed in the 
free list. You know very well that our outward-bound vessels to the English 
islands can get no sort of return cargo unless they go to Cuba or Porto Rico for 
sugar or molasses, or else to some salt port, or bring home some sort of wood or 
hides from St. Thomas, or the Main. I speak of small vessels that trade to the 
West Indies and the Spanish Main. 

" * Gross, crude articles^ of this sort, aid shipping interests, and assist making up 
cargoes to Europe of various such articles if free, such as logwood particularly, 
and Brazilletto and Rio Hache wood in cotton-ships even for dunnage. 

" * I call Free Trade the policy that lets crude articles in free as in " old times." 

" * As far as I can judge, and being myself engaged in shipping interests, I think 
this bill very unfriendly to such interests ; and as to being a Free-Trade bill, it is 
anything else, as I understand Free-Trade, as to the articles named. 

"* I am, dear sir, your friend and fellow-citizen, William Miles.'" 

Comment on such facts and such an argument is entirely superfluous. 



ON THE INTERESTS OF COMMERCE AND NAVIGATION. 451 

the community are involved in the deepest connmercial distress 
induced by them. Hence importing merchants are generally ir 
favor of Free Trade, with a few honorable exceptions. They care 
nothing about the country, if they can only gain a position that 
shall fortify them against the common calamities which they them- 
selves, by their cupidity, have brought upon the masses of the peo- 
ple, and which the people must bear. 

But it need not be said that a public policy, regulating foreign 
commerce, well devised and properly adjusted, is not designed to 
give a few importing merchants — more than half of them foreign 
factors, who pay no taxes, and carry away the money of the 
country — :a control over the fortunes of millions of the American 
people, and to enrich such cormorants, while it impoverishes the 
nation. Mr. Clay said well and truly, as long ago as 1810, in his 
first speech in the senate of the United States on the protective 
policy, "Dame Comtnerce," meaning, doubtless, these importing 
merchants, " is a flirting, flippant, noisy jade, like the wife who 
wished her husband to supply his table from the cook over the way, 
rather than have the cooking done at home in the kitchen." She 
did not like the trouble, nor the clatter, nor the smell. It was for 
her benefit, and not for that of the family, that she argued. So 
with importing merchants. They want Free Trade to enrich them- 
selves, though it makes the nation poor.* 

There is no doubt that Free Trade, or an approximation to it, 

between the United States and foreign parts, by an abandonment of 

the protective policy on our part, will, for a short season, increase 

the gross amount of imports and exports, or enlarge the gross 

* Apart from return cargoes, in a regular exchange of commodities, our import- 
ing business is chiefly done by foreigners. They send their agents here, who, hj 
their iniimale relations and a secret understanding at home, are able to supplant 
American merchants, to defraud our revenue by false invoices, and thus to 
crush those very American interests which were designed to be protected by the 
laws they violate. See Senate Doc, No. 83, 2d session, 27th Congress, for proof 
of fraud in the agents of oiie English house, to the amount of some hundreds of 
thousands of dollars. Also a voluntary fine of eighty-six thousand dollars, paid by 
seven agents of British houses, to Mr. Hoyt, collectorof New York, to compromise, 
and purchase exemption from the course of justice — and a variety of other evidence 
of the same kind — a mere index to the vast frauds that have been practised upon 
upon us with impunity. In 1842, and before the tariff of that year went into 
effect, 74 per cent, of the imports into the city of New York, and 19 per cent, of 
those into Boston, were on foreign account; and foreigners, of course, had all the 
profits; whereas, in 1845, it appears that by the operation of the tariff of 1842, 
the importing business in New York, on foreign account, had been reduced to 44 
per cent, of the whole, and in Boston to 9 per cent. It is now again, under the 
tariff of J846, rapidly reverting to foreigners. 



462 THE EFFECTS OF A PROTECTIVE SYSTEM 

amount of commerce, when reckoned in dollars and cents, though 
not in the employment of a greater amount of shipping. The 
great demand for shipping in the winter of 1846-'47, was owing 
entirely to the extraordinary scarcity of food in Europe, and can 
not safely be set down as a permanent rule. It would have been 
the same under any tariff, and under any policy, as a providential 
and unusual effect. The ordinary effect of the abatement or 
abandonment of the protective policy, as proved in the tables and 
other facts exhibited in our citations from Mr. Webster, is to di- 
minish the demand and use for shipping, and to lay it up; while 
the continuance of that policy increases both. Such has always 
been the case in our commercial history. In farther confirmation 
of the above alternative, take the following additional facts : Under 
the tariff of 1842, American boot and shoe makers were protected, 
giving rise to large importations of hides — a heavy article — which, 
in 1845, amounted to near four millions of dollars^ giving employ- 
ment to American shipping, as well as to American boot and shoe 
makers. This one fact will illustrate scores of other like cases, 
which operated in the same way under the tariff of 1842, giving, 
at the same time, employment to American shipping, and to Amer- 
ican labor. It is the raw material that makes freight. Manufac- 
tured goods make little. It may be well to remark, however, in 
this place, that our exports of boots and shoes, under the tariff of 
1842, had risen, in 1845, to the amount of $330,000, and the ex- 
ports of articles of American manufactures, of the same year, to 
about $12,000,000, being more than one tenth of all our exports, 
also augmenting foreign trade in the best way possible, by substi- 
tuting exports of our own products for imports of foreign and for 
re-exportations of foreign. 

But it is alleged that the protective policy diminishes foreign 
commerce. Though there may have been, for a time, larger im- 
portations in periods of low duties, or no duties in this country, 
there was not really more foreign trade, nor in fact so much, by a 
great deal, as during the periods of protective duties, take those 
periods, respectively, through and through. Like the well-to-do 
farmer, who begins to buy more than he sells, and soon gets out 
of money and out of credit — who does indeed for a little while 
trade largely, to his own ruin — so has it always been with this 
country in times of Free Trade. The moment duties were relaxed, 
importations increased, and there seemed to be a more active for- 
eign trade. Really, however, there was no more request for navi- 



ON THE INTERESTS OF COMMERCE AND NAVIGATION. 453 

gating craft — nor so much — inasmuch as the additional importa- 
tions were costly manufactured goods, of little weight. As soon 
as the country got in debt, lost credit, and was forced to buy less, 
the navigating craft had less employment, and was much of it 
hauled off, and laid up. The foreign commerce of the country 
was injured and diminished. Whereas, under the protective sys- 
tem, in all cases, foreign commerce has been more uniform and 
uniformly increasing; shipping has had better and more employ- 
ment, and navigation has rejoiced in its business and profits — 
never more than for a few years after the tariff of 1824; and never 
more than under the tariff of 1842. All the boasted increase of 
foreign trade, under low duties and no duties, has been the ruinous 
increase of a spendthrift, that brings debt, loss of credit, poverty, 
want, distress, in its train — beginning with flushed hope, and end- 
ing in disappointment. 

The most important view of foreign commerce, under the two 
systems, respectively, of low anti-protective and protective duties, 
may be stated thus : that the former system leads directly and uni- 
formly to excessive importations, or excessive buying, leaving a 
balance against the country, to be settled by drawing away its 
money, and leaving the people without a currency ; and in this 
way embarrassing and diminishing commerce. It was so under 
the colonial system ; the money all went to England. It was so 
under the confederation ; the money all went abroad, chiefly to 
England, to settle balances, because we bought more than we sold. 
The states, severally, then, possessed the only power to establish a 
protective policy, each for itself; and being unable to do it, with- 
out collision of interests, it resulted in a system of iierfect Free 
Trade^ and of complete commercial ruin. It appears by Mr. Sec- 
retary Woodbury's annual report to Congress, of 1840, that the 
imports into the country, for the first two years after the peace of 
1814, exceeded the exports by $126,466,059. How could the 
country pay such a balance, already deeply in debt as it was, when, 
in its best estate, there was not half so much money in the country? 
The tariff of 1816, in its most important protective provisions, 
defective at best, and of a brief term, did but little toward the set- 
tlement of the immense balance that had previously accumulated 
against the country ; and by the failure of the tariff bill of 1820, 
the country was doomed to run on again, under a system of low 
anti-protective duties, till the tariff of 1824 arrested it. According 
to Mr. Secretary Woodbury's report to Congress, in 1840, the 



454 THE EFFECTS OF A PROTECTIVE SYSTEM 

balance of foreign trade against the country for 1815, was sixty-one 
millions of dollars; in 1816, it was sixty-five nnillions ; in 1817, 
twelve millions : in 1818, more than twenty-eight millions ; in 
1819, seventeen millions; in 1820, about five millions; in 1821, 
two millions in our favor ; in 1822, eleven millions against us ; in 
1823, about three millions against us ; and in 1824, nearly five mil- 
lions. 

What country could stand up against such odds? And all this 
in uninterrupted succession, without any chance to pay. The na- 
tion writhed and groaned under it. Its money gone abroad to 
pay debts; banks suspended; the circulating medium become 
scarce, nobody knowing what it was worth, for it was irredeemable; 
business of all kinds in trouble ; property of every description 
depreciated ; and labor unemployed and starving. Who that is 
old enough to remember those years, will not certify to Mr. Clay's 
picture of them, in his answer to General Hayne, in 1832, as " ex 
hibiting a scene of the most widespread dismay and devastation" ? 

But, from the date of the tariff of 1824, when the protective 
policy was for the first time, in the history of the country, well 
established — and from which time it continued till the duties went 
down again under the Compromise act of 1833 — the prosperity 
of the country was restored; labor found employment and reward; 
private and public wealth increased ; the entire national debt of 
one hundred and sixty millions of dollars, left at the end of the war 
of 1812, was at last paid off in 1836, and thirty-seven millions of 
surplus funds in the national treasury were distributed among the 
states. In those years commerce spread its wings over all seas, 
was widely extended, greatly enlarged, and prosperous. 

But, behold the contrast, as the duties under the Compromise 
act descended below the protective standard, and approximated 
toward a system of Free Trade, till finally they came down to a 
maximum of 20 per cent. The excessive importations commenced 
as soon as President Jackson began to show his hostility to the 
protective policy, and continued down through the administration 
of Mr. Van Buren, who ''followed in the footsteps of his illustrious 
predecessor." The balance accumulated against the country in its 
foreign trade, in nine successive years under General Jackson and 
Mr. Van Buren — including three of the latter's administration — 
according to the records of the treasury department, was more than 
two hundred and fifty millions of dollars. The largest balance 
was in 1836, being sixty-one millions. The next largest was fifty- 



ON THE INTERESTS OF COMMERCE AND NAVIGATION. 455 

nine millions, in 1839 ; the next in comparative magnitude, was 
twenty-eight millions, in 1835 ; twenty-three millions in 1837 ; 
twenty-two in 1834 ; and so on. Nor is this all. It appears, by 
Fisher's National Magazine, for August, 1845, p. 279, that, for 
fifteen years, from 1830 to 1844, inclusive, the unenumerated arti- 
cles of imports amounted to one hundred and f fry millions of dol- 
lars, being an average of ten millions a year, which, fairly, should 
be added to the above balances. That these balances were real, 
and not fictitious, is proved from the fact, that, at the end of this^ 
disastrous period, the foreign debts of the country, actually ascer- 
tained, were found to be upward of two hundred millions of dollars, 
most of them public. The state debts — most of them abroad — 
were reported to Congress by the secretary of the treasury, in 
1842, as $200,855,793. A vast amount of other foreign debts, 
no small fraction of them private, and paid by bankruptcy, were 
unascertainable, swelling the aggregate much above the common 
estimate. " A Southern Planter," in his " Notes on Political Econ- 
omy," estimates the foreign debt of the people and states, in 
1844, at fo2ir hundred and fifty millions^ viz., two hundred millions 
of state debts; two hundred millions of bank, and corporation, and 
national stocks; and fifty millions of private debts — all owned 
abroad — drawing the interest annually from the country, for all 
that bankruptcy and repudiation had not kept back. He says, 
"it is enough to weigh down our industry for the next, fifty years." 

Here, then, is another result of a protracted period of low, anti- 
protective duties — a result of stupendous magnitude, impoverish- 
ing the people, the country, and the government, till neither had 
credit abroad, or at home, and till all were plunged in one common 
ruin. Commerce, domestic and foreign, withered under it, and 
was blighted. Who does not know this ? Who could ever forget 
it? And will any one arraign the assigned cause as questionable, 
when he always finds the same results after the same antecedents ? 

And behold the effects of the protective duties of the tariff of 
1842. The balance of trade instantly whirls about, and is in favor 
of the country ; twenty millions of specie return in one year in 
excess of the exports of it ; commerce spreads its wings again, and 
flourishes to an unexampled extent ; navigation finds full employ- 
ment ; private and public prosperity is revived ; business and credit 
revive ; labor everywhere finds work and meets with a satisfactory 
compensation ; the ruin of many years is repaired in four : all are 
prosperous, all happy, all satisfied, and the nation is advancing with 



456 THE EFFECTS OF A PROTECTIVE SYSTEM 

rapid strides, in wealth, greatness, and strength. Will any one 
doubt what is the cause ? 

The following mode of proof on this point, though little required 
after the above, is well worth presenting as another species of de- 
monstration — for it is nothing less: — 

It appears by the treasury documents, that the aggregate of dutia- 
ole imports from 1821 to 1824, inclusive, four years of low duties, 
were $264,960,000, an average of sixty-six millions annually. The 
average rate of duty on these articles was about 34 per cent. ; and 
the aggregate revenue for this term of four years, was over ninety 
millions. By the tariff of 1824, the average duty was raised to 38 
per cent. ; the aggregate imports of dutiable articles for the first 
four years, were $301,550,000, being an annual average of about 
seventy-five millions. It will be seen by these facts, that, with in- 
creased duties, there were increased importations of dutiable 
articles. By the tariff of 1828, the average duty was raised 
to about 41 per cent., and the amount of dutiable imports for the 
next four years was $297,330,000, with an annual average of 
$74,330,000 — scarcely varying from the preceding four years. 
As both periods were under a protective policy, the results ought 
to be similar. The next nine years, from 1833 to 1841, inclusive, 
under the compromise tariff, was a very remarkable period of bold 
and excessive importations, exceeding the exports for that time by 
about two hundred and thirty-one millions. The population of the 
country, too, had increased ; and it was natural enough that foreign 
trade, as a whole, should have been augmented during this 
period, when the average duty, from beginning to end, was about 
31 per cent., being 3 per cent, lower than the first, 7 lower than 
the second, 10 lower than the third, of the abovenamed periods. 
But what were the facts ? The aggregate of dutiable imports for 
this period of nine years was six hundred and thirty-one millions, 
giving an annual average of seventy millions against seventy-four 
millions, when duties were 10 per cent, higher. But this does not 
fully exhibit the difference in the effects of high and low duties on 
foreign commerce, without considering, that the exports of this pe- 
riod were two hundred and thirty-one millions less than the imports. 
That makes the difference in the comparative results startling. 
Under the tariff of 1842, it is sufficient to say, that the im- 
ports, free of duty, fell off from thirty millions in 1842, to twenty- 
two millions in 1845 — the fall having been gradual — and those 
paying duty (commonly stated at an average of 40 per cent., wherefvs 



ON THE INTERESTS OF COMMERCE AND NAVIGATION. 457 

the average duty of the tariffof 1842 was only 34.64 per cent.), rose 
from sixty-nine millions in 1842, to ninety-five millions in 1845 ; 
and that the revenue from duties, which had descended to less than 
thirteen millions in the last year of the compromise tariff, rose to an 
annual average of over twenty-six millions, under the tariff of 1842. 
The facts, that during this period, the amount of imports free of 
duty decreased, and those paying duty under a well-adjusted sys- 
tem of Protection, continued to increase in amount, relatively and 
positively, take the period as a whole, and doubling the revenue, 
are conclusive as to the effects of protective and anti-protective du- 
ties on commerce and revenue. The inference is fair, that Pro- 
tection gave the people the ability to purchase the protected articles, 
which they got cheaper in consequence of competition between 
home and foreign producers, benefiting themselves as consumers, 
benefiting labor by giving it employment and good wages, benefit- 
ing commerce and navigation, benefiting the country, on the largest 
and most comprehensive scale, and benefiting the government, by 
paying its debts, restoring its credit, and filling its treasury. 

The farmer who keeps up good fences, pastures only his own 
cattle, and keeps his crops from cattle that run at large, so that they 
can not break in, will be likely to have not only enough for home 
consumption, but something for market. And if he takes care to 
sell more than he buys, he will grow rich. If, by such economy, 
his annual income is greater than his expenses, it is impossible he 
should fall into bankruptcy ; it is impossible he should not increase 
in wealth. He has then a substantial capital on which to trade, and 
if he follows up the same principles of economy, in all his business, 
he will be able to do more and more business, and will become 
richer and richer. As he grows rich, his wants increase. He will 
buy more, because he is able to buy, partly for taste, partly for com- 
fort, and partly to augment the value of what he has. It was the 
tariff of duties which he imposed on himself and his neighbors — 
with no wrong to them, and certainly with great benefit to himself 
— it was this tariff, with which he started in life, that has made him 
a rich man, and able to trade largely with others; and it is the same 
tariff continued, that fortifies his position, still increases his wealth, 
and still extends his business. Such a man can never fail. It is 
impossible. But let him lay aside these habits of self-protection 
and economy ; let him throw away this tariff; let him begin to buy 
more than he sells ; let his fences go down, and all cattle running 



458 THE EFFECTS OF A PROTECTIVE SYSTEM 

at large feed in his pastures and on his crops — does it need a 
prophet to tell what will become of him ? 

It is precisely the same with a nation, as reason and all experi- 
ence teach. If it watches over and protects its own interests, it 
will grow rich, and be able to buy ; and having the ndeans, with 
the multiplication of its wants, it will enlarge its commerce with for- 
eign parts. As a man of small means will not buy the same things, 
nor so much, as a man of large means, so is it with a nation. A 
protective system will give, not only a better, but a more extended, 
more comprehensive, larger, and more diversified foreign com- 
merce, than a Free-Trade system. Look to the case of the farmer, 
above, who takes care of his home interests. Is he not able to buy 
and trade more, than if he had neglected his system of economy ? 
Free Trade makes a nation poor — especially the United States — 
as has been shown. How can a poor man, or a poor nation, buy? 
The protective system makes a nation rich — none more than the 
United States. It makes the people rich. It gives to every man 
the ability to purchase foreign luxuries. When a man grows rich, 
he has new wants, and those wants must be satisfied. When a na- 
tion grows rich, its wants will comprehend the productions of all 
parts of the globe, will increase in number, and in the aggregate, 
and in the same proportion will enlarge its foreign commerce. Go 
to Lowell, Massachusetts, and see what ranges, what whole streets 
of stores, full of foreign luxuries, and foreign products, are required 
to satisfy the wants of the ten thousand operatives in the manufac- 
tories of that city, and of the other population connected with them ; 
and let it be remembered, that they are not only able to buy them, 
but to grow rich on their wages. From this cause, the importations 
of cotton goods, of the finer sorts, paying the highest duties, were 
augmented, under the tariff of 1842, and for three years ranged 
from ten to thirteen millions. The operatives of Lowell support a 
suvings-bank in that city by their deposites, and many of them be- 
come stockholders, and even corporators, in the establishments 
where they work. In one company, $100,000 of the stock is 
owned by operatives ; in another, $60,000 ; and so on. 

Lowell, in these particulars, is but a picture of the whole coun- 
try under the protective system. The people were all well off, and 
were able to indulge in foreign luxuries, and to gratify a thousand 
wants, which could only be supplied by foreign commerce. 

The position of American labor relative to foreign labor, and of 
American interests relative to the interests of foreign nations, would 



ON THE INTERESTS OF COMMERCE AND NAVIGATION. 



459 



seem to have been entirely overlooked in those important and event- 
ful transactions called commercial and reciprocity treaties with for- 
eign powers ; and it is the more to be regretted, as they can not, 
like acts of domestic legislation, be at any time repealed, when 
found to operate badly ; but they must run on for the term of their 
stipulation, be it a greater or less number of years, till custom 
grows into the right of prescription, and the great interests involved 
become ahnost invincibly inclined to specific and accustomed chan- 
nels. Ultimately, the claim on the part of the United States to 
revert to a more just state of things, when the great injustice of 
these arrangements shall be discovered, may be the occasion of 
international controversies of a serious character — perhaps of war. 
Foreign powers, which enjoy these immunities, will not desire to 
tread back ; for they are too well aware that all the benefit of such 
treaties is generally theirs, and all the loss ours. They will claim 
what they have gained as a prescriptive right, and want more. 

It is not denied that a commercial treaty might be made, that 
would be just and beneficial to both parties, when the United 
States is one of them ; bu-t we are not aware that such a treaty evei 
has been made. It is doubtless because the parties in negotiation 
assumed the principle of recijjrocify as a basis, which necessarily 
involves the principle of Free Trade, and which is an unjust prin- 
ciple in its operation on the United States, for the reasons which 
have been before elaborated in this work. No matter in what 
mould Free Trade be cast, it will never answer for this country, 
but will always be injurious. It is equally bad to have it go into 
a commercial treaty, based on the principle of reciprocity, as to 
open our ports directly and at once to the extent of the stipulations 
of such a treaty ; which, as will be seen, is a mere truism, and is 
in fact Free Trade to the same extent. It is singular that Amer- 
ican statesmen and diplomatists generally, if not without exception, 
who have hitherto been concerned in these transactions, should 
have been so blinded to the great principle of protection, which, in 
such matters, it was their duty to vindicate and maintain, but 
which they have sacrificed, apparently as if they did not understand 
its application in the premises. " Reciprocity" seems like a 
very fair word, a very just thing ; but, when it means nothing more 
nor less than Free Trade, as it does in all commercial treaties be- 
tween the United States and other countries, it is very unfair, very 
unjust ; because, so far as these treaties go, in their practical opera- 
tion on us as a party, it brings American labor and capital, which 



460 THE EFFECTS OF A PROTECTIVE SYSTEM 

together cost more than double, into a direct and open competition 
with foreign labor and capital. It has been seen and felt that it 
operated unequally, even calamitously, to the United States ; the 
story has been often eloquently told, and the facts cited, showing 
how unfortunately it works ; but still American statesnrien and di 
plomatists go on, making new treaties on the basis of the same 
principle. And it would not perhaps be strange if, in this way. 
we should by-and-by find ourselves bound hand and foot to the 
car of Free Trade, by the irrevocable seal of commercial treaties, 
with all nations.* And all this for being ignorant of the fact that 
a reciprocity treaty is a Free-Trade treaty. Or did these agents 
of the country know it was Free Trade, and intend it as such ? 
*' What, then, shall we do?" it will perhaps be asked. The an 
swer is as short as the question : Fall back on the platform of the 
law of nations, which is broad enouojh and strontr enouo;h for all 
our purposes, so long as other commercial nations refuse to enter 
into treaty stipulations that will vindicate and defend the rights of 
American labor and capital. 

After the peace of Ghent, Great Britain adopted measures to 
exclude the navigation of the United States from her colonies, com- 
prehending a trade estimated at six millions of dollars ; but by a 
clause in the second article of the convention of London, the right 
of a countervailing policy was left open to the United States. On 
the basis of this right, an effort was made in Congress, in 1816 and 

1817, to exclude from the ports of the United States all foreign 
vessels, British or other, trading with those British possessions 
from which American vessels were excluded, with a view to force 
Great Britain to a reciprocity, and to recover those rights of navi- 
gation for American shipping. It was partially successful. In 

1818, a like attempt was more successful; in 1820, the act of 
1818 was superseded by a new one; and so again in 1823 — the 
design of each of which was to bring Great Britain to terms. At- 
tempts at negotiation were made under the administration of Mr. 

* A very grave constitutional question seems to be involved in these transac- 
tions, viz., Avhether the treaty-making power can lawfully be so far extended as 
to anticipate and bar the action of Congress in " the regulation of commerce be- 
tween nations," and in llie enactment of revenue-laws. The first of these powers 
is clearly wrested from the legislative department of the government by commer- 
cial treaties, and the effect of such treaties may seriously interfere with a revenue 
system, the origination of all the measures of which is committed to the house of 
representatives alone. It may even deprive that body of its most important ground 
of revenue. In this way foreign powers are constituted parties to American rev- 
enue legislation. 



CN THE INTERESTS OF COMMERCE AND NAVIGATION. 461 

Johrt Q. Adams, but the death of the British prime minister, Mr. 
Canning, put the question into new hands, and deferred a settle- 
ment. In 1829, Mr. Louis M'Lane was sent to London by Presi- 
dent Jackson, with instructions on this subject ; the question was 
claimed to have been advantageously settled, and the transaction 
much lauded ; the practical operation of which, however, made it 
worse than it was before, and it has never yet been satisfactorily 
arranged. It was under this reciprocity treaty, so called, negotiated 
by Mr. M'Lane, that events have transpired, and a course of trade 
and navigation has been established, between the United States and 
Great Britain, narrated and described in the note below, being an 
extract from the National Magazine, January, 1846, communicated 
by the Hon. James Tallmadge.* 

* " All these great questions of commerce, in all their consequences, are so im- 
mediately connected with agriculture and a market, I can not forbear to mention 
one other subject of great and commanding importance to the nation — I mean our 
numerous reciprocity treaties, so called. It is the misuse of the term, and the 
permitted abuse of those treaties, which calls for remark and public consideration. 
The injuries arising from those treaties are very great, as they are expounded and 
carried into effect, on us. Most of the nations of Europe have colonies in differ- 
ent parts of the ocean — the East or West Indies. But, to be brief, I must illus- 
trate by a single case. Great Britain readily makes a reciprocity treaty with the 
United States. It bespeaks great equality and mutual kindness. The flags and 
ships of each other are put upon the same footing in each other's ports, and to be 
received without distinction or discrimination. It looks all well. In practice, un- 
der the treaty, an American and an English vessel load at London with the same 
goods, and come in together at one of our ports. The duties collected must be 
upon the goods, and no diflerence in which ship the goods come. This country haa 
the right, and so has England, to lay whatever duties she thinks proper on the im- 
portation of the goods into their respective ports. England, accordingly, imposed 
a rate of duties on produce from the United States, so high as to be a prohibition, 
and a rate of duties on like articles from her own colonies, so low as to be nominal. 
The eflect of this is, that the American and the English ships, which come out to- 
gether, can neither of them take a return cargo of such articles from the United 
States to London, or any port, on account of the high duties. But the British ship 
can take the same articles from our ports, and sail to the nearest British colony, 
touch, and then proceed on to London, or any port. Her voyage is now from the 
colony, and she pays only the colonial duty on the very articles she took from our 
port. Thus she sails around the reciprocity treaty. The American vessel is not 
allowed to go from the colony to England ; can make no voyage ; has no market ; 
and is left in our docks. The British vessel soon again returns with another cargo 
of British manufactures. Thus, in the circle of her voyages around the reciprocity- 
treaty, she is in the sole possession of her own and our carrying trade ; encouraging 
their ship-building and shipping interest, and employing and training their seamen 
and vessels in the very trade sacrificed to this country by our American nego- 
tiators. 

*' We have heard, to use a modern and homely phrase, of ' going the whole hog.' 
But what farmer's boy ever supposed, because he had bargained for the old sow, 
that he had bought the whole litter, not mentioned in his agreement ? It is the 



4;62 THE EFFECTS OF A PROTECTIVE SYSTEM 

It can not be denied that the account given in the extract below 
is enough, and it would hardly be believed that we are now living 

taunt of Europe, that none but American diplomatists could ever have supposed a 
treaty with any nation embraced their colonies, not mentioned in it. 

"RECIPROCITY. 
" These few articles will serve to illustrate the whole : — 

Duties. From U. States. From British Colonies. 

On boards or other timber, per load of 50 cubic feet $7 68 $0 48 

On oars, per 120 36 00 90 

On handspikes, per 140 9 60 24 

On spokes for wheels, per 1,000 19 20 48 

On firewood, per load of 216 cubic feet 2 40 free. 

On bacon, 1J2 lbs. 1 75 84 

Beans, bushel 2 26 75 

Beef, bbl 3 58 87 

Butter, 112 lbs 5 00 1 12 

Cheese, do 2 37 58 

Feathers, do 5 00 2 25 

Flour, bbl 1 44 34 

Pork, 112 lbs 1 87 44 

Rice, 112 lbs 1 37 12 

Spirits from grain, gallons 5 62 2 00 

Oil, linseed, tun '...30 00 5 00 

Tallow, 1 12 lbs. 79 06 

Wheat, per bushel, on a sliding scale, prohibited unless almost famine 06 

" The course of this trade is, for British vessels to come into our ports and take 
a cargo of American produce, and sail, if at the east, for Halifax or an eastern 
province ; if at a southern port, for a West India island ; and having touched thus 
at a British colony, the voyage is then homeward from such colony. This avoids 
the reciprocity treaty — secures the carrying trade of our grain, timber, &c., as also 
the benefit of the discriminating duties in favor of the colonies. 

"The extent of the perversion and abuse, under the reciprocity treaties, will ap- 
pear in part from a recent treasury document, stating *the Commerce and Naviga- 
tion of the United States.' It states the ' clearances' to the province of New Bruns- 
wick to be : 154 American, and 1,267 British vessels (for nine months), from 1st of 
October, 1842, to 1st of June, 1843. The Americans were mostly in pursuit of 
plaster for the New England states. The British vessels were in the carrying trade 
of our timber, lumber, and fish, and to touch only at New Brunswick, and thence 
home, paying only their colonial duties on our timber, &c., and which is prohibited 
to American vessels. The table of ' entrances' will illustrate : — 

American. British. 

Passamaquoddy 63 43 1 

Portland 42 62 

Portsmouth 8 50 

Gloucester 2 31 

&c., &c. These facts sufficiently show the destructive course of this business. 
The trade on our lakes is equally bad : — 

American. British. 

Niagara 24 224 

Genesee .^...38 88 

Oswegatchie 95 212 

&c., &c. 



ox THE INTERESTS OF COMMERCE AND NAVIGATION. 462 

under such a state of things, or that It has existed for nearly twenty 
years without redress. It is further stated in the same Magazine, 

"In March, 1841, I came up the Savannah river, and there saw 11 large British 
vessels loading with Georgia timber — no American vessels there! This course 
of trade is not allowed to an American vessel. Reciprocity in British trade, means 
— our ports open to her commerce — her ports shut to our commerce. It is much 
better for her than Free Trade. In that, we should be in competition with her; 
in the reciprocity trade, we are shut out. 

'•' But this reciprocity trade is not restricted to our country, or to our productions. 
The treaty extends to Brazil, to Hayti, or any part of the world where the enter- 
prise and the voyage of an American vessel can be defeated. 
"BRITISH FREE TRADE. 

" ' Foreign coffees are charged Is. 3d. per pound duty, colonial coffees only 6rf., 
while coffees imported from the Cape of Good Hope pay 9c?. Now, as the cost of 
sending, in an unusual and indirect way, coffees from a foreign country to the Cape 
of Good Hope, is only from \d. to Id. per pound ; very large quantities are shipped 
from Brazil to the Cape, and thence reshipped to England.' — Report of a Commit- 
tee to Parliament, 1840. 

" ' Have cargoes of coffee been sent from the United Kingdom, and from ports of 
the continent of Europe, to be landed at the Cape of Good Hope, and thence to be 
brought back to the United Kingdom, for the purpose of supplying the necessary 
consumption here ? 

"< Yes : from 26th April, 1838, to 24th March, 1840, it appears by the returns, 
that 81 cargoes, importing more than 21,000,000 lbs. of foreign coffee, had arrived 
in the United Kingdom, from the Cape of Good Hope. The duty on that mode of 
carrying coffee is 9d. per pound. If entered from a foreign country, Is. 3d. The 
duty saved by the indirect importation would be 750,000 pounds sterling (about 
$3,750,000).' — Examination of McGregor, annexed to Report. 

" The intent and meaning of this is, that the American vessel can not take the 
coffees, to pay Is. and 3rf. sterling per pound in England. She is not allowed to 
go with a cargo from the English settlements at the Cape of Good Hope to an Eng- 
lish port. The British vessel takes the coffee, touches at the Cape, and thence her 
voyage is home, where she pays 9i. per pound duty — with only \d. or Id. per pound 
for increased cost of her indirect way. Should the American vessel take a cargo, 
and conclude to bear the difference of duty, the English vessel would soon arrive, 
and with its difference of duty in her favor (being twelve cents per pound) would 
undersell and ruin the American voyage. Thus the American shipowner, with 
blighted hopes, learns that his own government has not only negotiated him out of 
the carrying trade of his own country, but has also turned him out of the carrying 
trade between all other nations and England. It is apparent that the English gov- 
ernment negotiated for its subjects; but it is very difficult to say for whom the 
American government negotiated. 

" Our neighbors, the Spaniards, have also learned something of this mode of com- 
merce, and of the kindness of our governmejit, under any outrage, in its commer- 
cial arrangements. She, too, has provided a duty on cotton, so high as to prohibit 
its importation in American vessels ; while it is brought from her colonies in her 
own vessels at a nominal duty. Some few years ago, I went from New Orleans to 
Havana, in an American vessel, laden in part with cotton. I noticed the course of 
the trade. On arrival at Havana, the cotton became the produce of Cuba, and was 
then shipped, as such (with the NewOrleans bags and marks upon it), in a Spanish 
vessel for old Spain, and paying only the colonial duty. 

"These measures show the devices to gain our trade, to exclude American ves 



464 THE EFFECTS OF A PROTECTIVE SYSTEM 

May, 1846, that while, in 1830, the year of the ratification of this 
treaty, American bottoms carried exports from this country to 
Great Britain, to the value of $19,876,000, and British bottoms ta 
the value of $5,897,000, the British carrying-trade had increased in 
1844 to $18,716,000, against $29,078,000 in American bottoms, 
showing an increase in fifteen years, in favor of British bottoms, 
of over 300 per cent., against an increase in American bottoms of 
less than 50 per cent. On the authority of the secretary of state, 
house document No. 163, second session, twenty-seventh Congress, 
it appears that the result of our treaty of 1828 with the Hanseaiic 
towns is, that before that treaty, ^ve sevenths of the vessels entering 
those ports from the United States were American ; and that, in 
184:0, fou7'Jlfl/is were Bremen, and only oneffth American. We 

sels, to injure their carrying trade, to lessen their shipping interest and ship-build- 
ing, to depress their commerce and navigation, and all in violation of the faith of 
a treaty professing to be reciprocal. 

"Among the many fruits of these measures, is the groviring increase, within the 
last few years, of foreign tonnage in the American commerce. The entries and 
clearances (not coasting) at some of our ports are m«re than three quarters for- 
eign." Mr. Webster, as above, puts one third of our foreign trade in foreign bot- 
toms. 

We are indebted to the same authority as above, Mr. Tallmadge, for the follow- 
ing table, which, though not exactly in point to the subject of this chapter, is in- 
structive, and worth citing: — 

Total export of articles^ the growth or produce of the United Stales, to England, Scot- 
land, and Ireland, with the duties paid thereon, during the years 1838, 1839, 1840. 

1838 Value. .$50,481,624 Duties. .$23,621,160 46 7-10 per cent. 

1839 " ..50,791,981 « ..26,849,477 52 8-10 per cent. 

1840 " ..54,005,790 « ..28,360,153 52 5-10 per cent. 



Total... « ..155,279,395 « .. 78,830,790 Av. 50 5-10 per cent. 

Of the above, the value of cotton and tobacco, and the duties paid thereon, were 
as follows : — 

1838 ^ ^°"°" Value. .$45,789,687 Duties. .$2,761,612 



1839 
1840' 



Tobacco " .. 2,939,706 « ..19,860,898 

Cotton « .. 46,074,579 « .. 1,942,337 

Tobacco " . . 3,523,225 " . . 23,288,396 

Cotton " .. 41,945,334 " .. 3,247,880 

Tobacco " .. 3,380,809 " ..22,537,205 



Total « ..143,653,340 « ..73,638,328 

All articles other than cotton and tobacco, the growth or produce of the United 
States, exported to England, Scotland, and Ireland, during the same three years, 
amounted to $11,626,055, or $3,875,351 annually. Omitting cotton. Great Britain 
has levied an average duty of 330 per cent, on all articles the growth or produce 
of the United States. 

The duty on raw cotton was repealed in 1845, and other duties on some of our 
exports to Great Britain, have been somewhat modified and relaxed ; but not enough 
essentially to vary the result, as above stated. 



ON THE INTERESTS OF COMMERCE AND NAVIGATION. 465 

have a similar arrangement with Sweden, in consequence of which, 
as stated by the same document, she had entered on our China 
trade, in the case of the Swedish ship Albion, and was likely to 
trespass further on American navigation. Nothing has proved 
more deceptive, or more injurious to the navigating interests and 
commerce of the United States, than these commercial treaties, 
professedly based on principles of reciprocity — a mock reciprocity. 
The great commercial nations, such as England, France, Russia, 
Sweden, Portugal, Holland, and Belgium, have loaned their craft 
to the flags of the small states, such as Denmark, Hamburg, Bre- 
men, Prussia, Brazil, Tuscany, Rome, and Greece, which had 
nothing to lose, and everything to gain, by arrangements of this 
kind with the United States. Thus the larger commercial powers 
have stolen the benefit, and escaped from the obligation of reci- 
procity. 

The importance of protecting American navigation and com- 
merce does not end with the interests of the parties engaged in 
these pursuits, nor with its influence on the general wealth of the 
country. The commercial marine of a great maritime nation is 
the great and only school of training for its public marine — for 
its navy. For this sole purpose, it has been thought best to enact 
bounties for our fisheries, which are still continued. Is it consist 
ent to tax the people for such bounties with one hand, while the 
other is stretched forth, in the form of commercial and. reciprocity 
treaties, not only to rob the nation of ten, or fifty, or a hundred 
times of the same kind of benefit purchased by these taxes for 
bounties, but to tax the people indirectly, by robbing them of a 
navigation and commerce worth millions ? That item of six mil- 
lions of dollars' w^orth of commerce lost to our navigation by British 
legislation after the convention of London, in 1815, can not have 
been diminished, but must have greatly augmented, under the re- 
ciprocity treaty of 1830. But setting aside these interests of navi- 
gation and commerce, thus sacrificed, the consequent sacrifice to 
the public marine of the nation, in such a large abridgment of the 
only school of preparation, is no trifling consideration as it relates 
to public economy. In whatever point of view, therefore, these 
commercial and reciprocity treaties are regarded, and in all their 
bearings on private and public interests, they seem to have nothing 
in them but elements of great injury to the nation, as they have 
hitherto been constructed. 

Foreign commerce, under a protective system, may be made ta 
30 



466 THE EFFECTS OF A PROTECTIVE SYSTEM 

supply all the wants of the government, in a time of peace, without 
taxing the people. That it may be made to supply all the wants 
of the government, in a time of peace, is proved by the tariff of 
1824, 1828, 1832, and 1842 ; and that it will not tax the people, 
is proved from the fact, already established in this work, that pro- 
tective duties are not only not taxes at home, but that they are a 
rescue from an enormous system of foreign taxation. These points 
being established — as they are beyond controversy — it is clear 
that a protective system, properly adjusted, without imposing du- 
ties on foreign articles that can not be produced at home, might be 
made to supply all the wants of government, in a time of peace ; 
and therefore without taxation, since protective duties are not taxes. 
Much more than this is probably true — though it can not be 
asserted with so much confidence — viz., that a protective system, 
without imposing duties on articles which can not be produced at 
home — except, perhaps, some luxuries, and other articles not in- 
dispensable to the poorer classes — might be so adjusted as to liqui- 
date a very heavy national debt, in addition to defraying the ordi- 
nary expenses of government — all. of course, without a tax upon 
the masses, since protective duties are not taxes. Such are the 
resources of the country, such the amount of its home products 
and home trade, and such the ingenuity, skill, industry, enterprise, 
and physical ability, of the people, that, under an adequate system 
of protection, there are no assignable limits to the possible increase 
of the general wealth, or to the ability of the people to consume 
foreign products, subject to protective duties. Protect the people, 
let them grow rich, and they will buy largely from abroad, to raise 
an indefinite amount of revenue — enough, probably, to meet any 
future contingent wants of the government, even though a war debt 
should be run up to one or two hundred millions — all, of course, 
for the reasons before stated, without a tax in any form, direct or 
indirect, since protective duties are not taxes. 



ON THE HOME TRADE. 467 



CHAPTER XXIX. 

THE EFFECTS OF A PROTECTIVE SYSTEM ON THE HOME TRADE. 

The Home Trade the Basis of llie Fortunes of the Country — " Agriculture, Manufactures, 
and Commerce," the American Coat of Arms — Home Trade has always made the For- 
tunes of all great Continental Nations — Insular Nations an Exception. — The Domestic 
Resources of the United States incalculable. — We have all Climates deemed good, and 
all Physical Elements of Wealth. — The Country and the People fitted for each other.— 
The Country a World in It?elf. — Care. Work, and Frugality, at Home, the same for a 
Nation as for a Private Individual. — " Far Fetched, dear Bought." — Home Trade does 
not diminish, but enlarges the Amount of Commerce, as ten Miles is only Half of Tvv'enty, 
and can be gone over twice for once of the latter.— The thriving Man works on his own 
Estate. — Difference in Results of Trade between Parties to a Nation and Nations as 
Parties. — The comparative Amount of Home and Foreign Trade. — Statistics. — Amount 
of the Products of Labor in the Country. — Amount of Internal and Coasting Trade. — 
Statistics. — Adam Smith on Home Trade. 

Our home trade is, and must for ever be, the basis of our for- 
tunes. In foreign trade, we have almost always been losers, and 
the loss, as before seen, has been immense. Individuals have 
profited, at the expense of the public. Hence the seductions of 
foreign traffic, and the necessity of taking care of it, that the state 
receive no damage. The branches of foreign commerce are like 
the tenders of a fleet, the scouting-parties of an army, the roving 
agents of a great commercial house. If licensed with privileges, 
care should be taken that they server not injure, the main bodies. 
Every merchant in the foreign trade sails under the flag of his 
country. It is loaned to him, protects him, secures to him all his 
aenefiis. Besides being a merchant, wherever he goes beyond the 
oounds of his country, he is a public political agent.* 

* Mr. Laing, an eminent British authority, says : " In every country, the home 
market is the great and steady basis of its prosperity. Commerce itself, if it be 
not founded on home consumption — if it be merely a carrying-trade between dis- 
tant producers and distant consumers, has proved itself, as in the Hanse-Towns, 
in Genoa, Venice, and Holland, to be unstable, evanescent, and unattended with 
.any well-being and improvement in the condition of the mass of the people. The 
export trade is but the overflowings of the cup of our industrial production. Its 
fulness is all within its own rim." 

The " Southern Planter" says : " Commerce has as deep an interest in securing 
the home market and supply as manufacturers can have. Commerce has no pa- 
triotism in it, when based upon foreign supplies. All its profits are incidental, 
and have reference to its basis and support. Like the light of a satellite, the 
profits of commerce are borrowed and reflected, not inherent as the centre sun oi 
business — not creative, as the producers are." 



4(r8 THE EFFECTS OF A PROTECTIVE SYSTEM 

Having descended from a great commercial nation, the peop'i 
of the United States very naturally imbibed the spirit of their an- 
cestry ; and being favorably situated for external and foreign com- 
merce, it has always been one of their favorite and great pursuits. 
** Agriculture, manufactures, and commerce," have ever been the 
three comprehensive words which represent the interests of this 
country. It is too late, therefore, to raise any abstract question 
about the utility of foreign commerce, although much might be said 
of a country that is a world in itself, and that has no disjunct and 
remote dependencies, in favor of a policy chiefly domestic. In 
the history of the past, it will be found that nations which have 
flourished the longest, and attained to the greatest wealth and to 
the most imposing grandeur, eschewed foreign commerce, and 
chiefly devoted themselves to domestic arts and trade ; and that as 
soon as they changed this policy, they began to decline, steadily 
going downward as they multiplied their commercial connexions 
abroad. China, Hindostan, and ancient Egypt, are of this class. 
The exceptions to this rule, apparently, are cities and states in an 
insular and confined condition, as Tyre, Venice, and Great Britain. 
There would at least seem to be enough in history and reason to 
show that the interest, or estate, or commonwealth, which is not 
sound and strong at home, will only be weakened and dissolved 
the sooner by stretching out its arms abroad. Foreign and remote 
connexions of a state, either commercial or political, are always in- 
terests of great delicacy and precariousness in the hands of states- 
men, and require consummate wisdom and great practical tact for 
a care and management which shall bring profit to home interests, 
and equal advantages to all parties. 

It can not but be seen, from the ground already gone over in 
this work, that the United States, from the beginning down to this 
time, have blundered and stumbled along, at great hazard and im- 
mense loss, and with innumerable bruises, in the management of 
our foreign policy and commerce. And what is our foreign com- 
merce worth, as compared with our home interest and trade? — 
A due consideration of the facts to be presented in this chapter, 
will answer this question. 

The resources of the United States are literally beyond estimate, 
speaking only of what they are, independent of the capabilities of 
the people, to which they lie in abeyance, and by which they have 
been in part, and are to be more fully, developed. There is no 
necessity of man or of society that is not to be found, or which can 



ON THE HOME TRADE. 469 

not be produced, here. The United States and territories com- 
prehend the finest belt of this western continent, stretching from 
ocean to ocean, and from the icy north to torrid climes. The 
country has all the climates that could be desired by man, and is 
capable of all productions of the soil necessary to man. There is 
scarcely a plant, or vegetable, or shrub, or tree, on the habitable 
earth, which is not either indigenous or capable of being cultivated 
here. It is not within the memory of man, nor in the records of 
known history, when, if, by unpropitious seasons, there was a 
scarcity of the necessaries of life in one or more parts of this wide 
domain, there was not a plenty in others, sufficient for all demands. 
Nature, in this field, is everywhere bounteous in her gifts, and 
abundantly rewards the labors of man. The bordering seas, the 
lakes, and rivers, teem with supplies of every fish known to the 
waters, and good for food. As the forests disappear before the 
advancing strides of civilization, the mineral world unfolds the 
exhaustless wealth of its bosom. The leaping streams and plun- 
ging rivers, found in every quarter, supply a power of motion that 
could never be used up, even if coal and steam were not likely to 
supersede a moiety of their purposes. The great natural bosoms, 
arteries, and veins, of inland trade, aided by a network of artificial 
communications, easily cut or built, have brought and are bringing 
the remotest parts of the land into one neighborhood. The soils 
are indefinitely capable of all imaginable productions, and the founda- 
tions of the hills and mountains are not laid deeper or broader than 
the mines of wealth which they contain. Much as has been al- 
ready developed of the resources of this vast field of nature, by 
the enterprise, labor, and arts, of the people, in the brief term of 
their history as a nation, and much as has been realized of its pro- 
lific and deep beds of wealth, all this presents only the superficies 
of the profound and exhaustless treasures that lie undiscovered be- 
neath. The United States and territories under its jurisdiction 
are a world which the labor and industry of a thousand generations 
could not fully explore, or begin to exhaust of its capabilities — a 
world that challenges cultivation and research, with a promise of 
reward not elsewhere to be found — a world which, the mere it is 
used, the more it presents that is profitable for use, developing new 
sources of wealth with every stage of improvement. In a word, 
there is nothing wanting here to make those now tenants of these 
territories, and those that may come after them, independent of all 
the world — nothing but the purpose to make it so ; and besides 



470 THE EFFECTS OF A PROTECTIVE SYSTEM 

the blessing of independence, they would gain more wealth, become 
more happy, and be vastly more powerful, in the execution of that 
purpose, than by roaming abroad to get what costs more than it 
comes to, and what hitherto has impeded the growth of this coun- 
try more than all other causes, and neutralized the gains of domes- 
tic industry and home labor. 

God made the country, and God made the people, the one fitted 
to the other. It is true that all things naturally adapt themselves 
to the influences of their position, and it matters little whether the 
country was made for the people, or the people for the country ; 
or whether both were providentially designed for each other ; or 
whether neither of these propositions were exactly true when con- 
sidered apart : it is Providence at last that brings about these mu- 
tual adaptations where the two are brought together. It is true 
any how that the Anglo-Saxon race are not behind any other race 
in enterprise and in all the capabilities of making the most of their 
circumstances, and in putting forward society and civilization, 
wherever they are. They have done a great work since they made 
a home on this continent, and the only obstacle to their career is 
a looking back and hankering after " the leeks and onions of 
Egypt," and holding on to the apron-strings of a parent-race. 
This country has come to be a world in itself; and if all the rest 
of the world were sunk to-day, never to be found, we might feel 
the w^ant of tea and coffee, and a few foreign luxuries, for a season, 
till substitutes should be found, or the same things be produced 
among ourselves ; but the skill, science, art, industry, labor, enter- 
prise, civilization, resources, and capabilities, still left behind, 
would amply supply the loss, and it would scarcely be fell. It 
would be far better than a system of Free Trade, as the world 
now is, holding us for ever in bondage. Let this country be put 
on its own resources and capabilities, and it would rise and march, 
with giant strides, to its own proper and legitimate destiny of un- 
exampled wealth, greatness, and power. It requires nothing to 
accomplish this but an adequate system of protection. 

Home trade is always best, and most productive of wealth. It 
is no matter in what sphere the operation of this principle be con- 
sidered, the result will be the same. It will be best appreciated by 
viewing it on a small scale. Take any man, of any calling, in his 
own narrow circle. If he keeps within his own limits, is industri- 
ous and frugal (frugality is self-protection, or a tariff of duties 
which every man of good economy imposes on himself and his 



ON THE HOME TRADE. 471 

neighbors), he is sure to prosper. It is husbanding his own affairs 
well at home, that makes him rich. If a farmer wants any addi- 
tion to or change in his stock ; or any of the products of the man- 
ufacturer or the mechanic ; or groceries or cloths of a tradesman ; 
or whatever be his wants, or the wants of any other member of the 
community, no such person makes a long journey, or sends an 
agent abroad, at an unnecessary cost, if he be a man of economy. 
But he accommodates himself as near home as possible. Every 
one finds, by experience, that a home trade is the best and most 
profitable, and that " far-fetched" is always " dear bought." The 
economy of home trade is all comprehended in this simple view. 

Examples of this kind illustrate all others, between persons of 
the same pursuits, and persons of different pursuits, running through 
all classes of society. The farmer wants the mechanic's products, 
and the mechanic wants the farmer's ; the tradesman supplies the 
people in his neighborhood with articles which they want, and can 
not get at home, and takes their surplus products to trade in where 
they can not trade ; and both parties are accommodated, with profit 
to both. The nearer home a trade is made, is both private and 
public economy ; and a trade made at home, is better and more 
economical, than that made anywhere else. Transportation, and 
the pay of intermediate agents, are always a tax and a loss, which 
a home trade saves to one party or the other, and always to the 
public. 

If it be said that these intermediate agents need employment, it 
can be obtained without living on others ; and the principle of such 
a reason, carried out, as will be seen, is, that men should live on 
each other, till nothing remains among them all. But the very 
object of giving employment to these agents, and multiplying other 
employments, is best secured on the principle of protecting and 
augmenting home trade ; for that is the best way to extend, enlarge, 
and diversify commerce. It is not proposed by advocating home 
trade, to restrict commerce. On the contrary, it is maintained, 
that, by keeping things well at home, on a small or large scale, with 
individual persons or communities, is the safest and surest way to 
branch out. But that person or that community that branches out 
without a good foundation at home, will be likely to get into 
trouble. It is by keeping everything tight and secure at home, 
that the extension and ramifications of trade are carried on with 
profit ; and the greatest part of the trade of society, of the world, is 
transacted in a small way, and in very limited spheres. It is these 



472 THE EFFECTS OF A PROTECTIVE SYSTEM 

small and limited operations of commerce which sustain large and 
extended transactions ; whereas probably not a thousandth part of 
the minor operations ever reach the larger, though they always con- 
stitute the basis. All the litde trade of society, which, after all, 
makes its great bulk, is noiseless, everyday, commonplace, between 
neighbors, in the never-ceasing exchanges which they carry on with 
one another, for mutual advantage and profit. The thriving man 
is he who is always found working at home, and the nearer his 
customers are, so much the better for him ; and the nearer he is to 
those with whom he trades, so much the better for them. Their 
business is compact, firm, prosperous. This is the way a man, a 
community, a nation gets rich ; and being rich, becomes a better 
customer, the man to his neighbors, the community to adjoining 
communities, and the nation to other nations ; and under such a 
system, all these parties are mutual helps to each other. It is be- 
cause there is a home foundation, created at home, to trade upon. 
Without this, they could not trade at all, honestly, and with profit. 
It is not good economy to employ intermediate agents in trade, for 
the sake of employing them. In that way men become a burden 
to each other. But the better way is, to work and thrive at home, 
and thereby create occasions for a trade that shall set these agents 
in motion, and make them necessary ; and the greater the home 
thrift, so much more numerous and extensive will be the ramifica- 
tions of trade which it calls into action, beginning at home, and 
branching out over the nation, and over the world. 

All engaged in home trade, are parties to the nation ; but in the 
case of imports and exports, the nation is a party. It must be 
seen that a home trade can not but be beneficial to the nation ; and 
the more of it, the better. All engaged in it are parties to the 
same commonwealth. Some lose, and some gain ; but the com- 
monwealth is always a gainer in domestic trade. In the commerce 
of the world, the world is the commonwealth, and as a whole is 
made richer. In the same manner as individual persons are parties 
to the nation, in a home trade, nations are parties to the world's 
commonwealth, in the world's trade; and in the same manner as 
some of the parties to a nation become rich, and others poor, in a 
home trade, one gaining and another losing, according to their re- 
spective systems of private economy, so in the world's trade, between 
nations as parties, one is benefited and another injured, one gains 
and another loses, according to their respective systems of public 
economy. In all foreign commerce, the nation is a party, and the 



ON THE HOME TRADE. 473 

negotiator the agent. If all the agents together sell more than they 
buy, the nation, so far as these transactions are concerned, is a 
gainer, and adds to its capital. But if the agents buy more than 
they sell, the nation, on the same conditions, is a loser, and parts 
with capital. Although these two propositions are incontrovertible, 
in the form in which they are stated, yet, many things are to be 
considered, to determine, whether, in the case of the first, it would 
not have been still better for the nation, if a part of this trade had 
been done at home ; while it is manifest, in the case of the second, 
that it would have been better for the nation, if so much of this 
trade had been done at home, as to have prevented the balance 
against it. In order to determine on what conditions, in the case of 
the first proposition, it would have been better for the nation, 
if a part of this trade had been done at home, and what part of it, 
it may be observed, it would be precisely that portion of the im- 
ports which could have been produced at home, under a system of 
protection, and in their production made to consume what was sent 
abroad to buy them. In that case, all the profits of these transac- 
tions, in consumption of raw materials, in production, and in the 
home trade concerned in it, in all its stages, would have become a 
part of the permanent capital of the nation, besides the additional 
employment for subsistence which it would have given to the par- 
ties engaged in it. As the Southern Planter, cited elsewhere, 
says, "Figures can't calculate the difference. It outstrips every- 
thing but the human imagination" in its results.* 

This position of a nation, as a party, in all its foreign commerce, 
seems to have been entirely overlooked by the Free-Trade econo- 
mists. Yet, who can deny that it is so, for all the purposes of pub- 
lic economy ? We do not say that the nation, as such, does the 
business ; nor, that the agents are not parties, to the extent of their 
own transactions, as much and as truly as if they were engaged in 
the home trade. But we do say, that, for all purposes of public 
economy, the nation is not only a party, but the party, when the 
entire amount of these transactions of its foreign commerce is con- 
sidered ; and the nation may be a loser, when the merchants, who 
have occasioned this loss, have made their fortunes, as shown in a 
former chapter. Nor can the nation lose without dividing the loss 
among the people. The principle that the nation is a party in its 
foreign commerce, considered as a whole, is that which controls 
this question, and determines when, and how far it has need of a 
protective system. 



474 THE EFFECTS OF A PROTECTIVE SYSTEM 

As remarked in the opening of this chapter, the branches of for- 
eign commerce are like the tenders of a fleet, the scouting parties 
of an army, the roving agents of a great commercial house. They 
are not the fleet, nor the army, nor the trading company. They 
are mere sprigs of a tree, offshoots of a trunk, accidents of a sys- 
tem ; and if the nation be a great and powerful one, of abundant 
territories and resources, and without foreign dependencies, these 
sprigs may be cut off*, and these accidents dropped, without any 
very sensible effect, possibly with benefit to the main body. This 
latter contingency, to wit, a possible benefit, depends on others, 
which it is unnecessary here to consider, inasmuch as it is not pro- 
posed to abandon the foreign commerce of the United States, and 
inasmuch as it is granted, that, under proper regulations, it may be 
beneficial. But, it is one of the greatest imaginable mistakes, to 
assume, that it is beneficial, in any case, and without a well-con- 
sidered and discreet regulation. A world of facts has been pre- 
sented, in the progress of this work, to show, and which conclu- 
sively prove, that the foreign commerce of this country has hitherto, 
for want of proper regulation, been one of the most formidable 
obstacles to the general prosperity, and an insuperable impediment 
to the march of this great commonwealth in that career of improve- 
ment, greatness, and power, the elements of which have been 
planted in its bosom by Providence, and which are inherent parts 
of the republic. It is also a very common and great mistake to 
put our foreign commerce before our home trade, in the estimate 
of its comparative importance ; nor is it less common to overesti- 
mate its comparative amount. 

The average annual aggregate of our imports and exports, in a 
healthful state of foreign trade, does not ordinarily much exceed 
two hundred millions of dollars, or one hundred millions of each. 
But what is this, compared with the aggregate amount of our home 
trade ? It is a very inconsiderable fraction, as the facts stated in 
the note below will show.* 

* By the " statistics of products and condition of certain branches of industry 
of Massachusetts, for the year ending April, 1845" — official documents — it ap- 
pears, that the products of the industry and labor of that state, for the aforesaid 
year, amounted to $124,735,264; that the capital invested, as the basis of this pro- 
ducing power, was $59,145,767; and the hands or persons employed in these pro- 
ductions, were 152,766. The average annual export of the products of the United 
States, of all kinds, for the last twenty years, has been about $80,000,000. It ap- 
pears, therefore, that the annual product of the industry and labor of the single 
state of Massachusetts, is full 50 per cent, in excess of all the exports of the whole 
United States. 



ON THE HOME TRADE. 475 

!• oreign trade, as before seen, may and will injure the country, if 
not carefully guarded by a protective system. Domestic trade can 

There does not appear to be an agreement among our statistical authorities, as 
to the annual product of the industry and labor of the United States. On the basis 
of the census ef 1840, Professor Tucker rates it at $1,045,134,736. But it must 
be seen, by the above official statement for Massachusetts, in 1845, thai there is 
probably some defect in Professor Tucker's statement, which is partly accounted 
for in his classification, embracing only, as quoted in the National Magazine, No- 
vember, 1846, p. 561, agriculture, fisheries, forests, mmes, manufactures, and 
commerce. But, in senate document, 340, 2d session, 27th Congress, a report 
from the committee on manufactures of that body, submitted by Mr. Simmons, it is 
said : "We present a statement of the amount of the market value of the annual 
products of several branches of industry, as exhibited by the returns of the last 
census [1840] : The value of the annual products — 

Of the fisheries, was $15,204,142 

Of the forest 21 ,269,032 

Of mines 48,658,108 

Of manufactures and mechanical trades 457,875,238 

Of agriculture 1,252,^682,223 

1,795,688,743 
Omissions estimated at 204,3 1 1,257 

" Total $2,000,000,000.'' 

This statement of the annual product of the labor, industry, and arts of the coun 
try, is probably quite as large as facts would justify, though the secretary of the 
treasury, in his annual report for December, 1847, has raised it to $3,000,000,000. 
But this is extravagant, and without foundation, like many other things in that 
dreamy and unscrupulous document, the errors of which could scarcely be told, as 
repeatedly demonstrated on the floor of Congress, without disproof, or even con- 
tradiction, on the part of the secretarj--, whose position, in such a case, demanded 
a reply and vindication, if one could be made. 

Among the many proofs brousht forward in Congress, of the errors of this report, 
those presented in the speech of the Hon. Andrew Stewart, January 11, 1848, and 
in that of the Hon. John A. Rockwell, March 1, 1848, are very impressive, not to 
say astounding — sufficient to discredit the document entirely as a reliable source 
of information, not simply in his assumptions in defence of Free Trade, but in 
matters of finance indifferent to all parties. It was this latter class of errors which 
brought back the Hon. Albert Gallatin from the borders of the grave, to show, in 
his pamphlet on the subject, how glaring and alarming they were. 

When it is considered what a variety and amount of the products of the country 
and how many classes must necessarily escape the notice of the official agents of 
government, the estimate for omissions, in the senate document above referred to, 
may be regarded as moderate ; and considering the authority of the document, as 
well as its approximation to the harmony of proportion, when compared with the 
official report of Massachusetts — not to speak of the growth of the country and 
the increase of its annual products since 1840 — this statement may, perhaps, 
safely be regarded as not too large. We may receive it, then, as the exponent of 
the present annual value of the products of the industry and labor of the people 
of the United States. If, then, the aggregate annual products of the Union, of all 
kinds, be estimated at $2,000,000,000, and if the average annual export of the 
same be $100,000,000, it will be seen, that only about me twentieth of the entire 
product leaves the country, and that the rest is consumed or used at home. As 



476 THE EFFECTS OF A PROTECTIVE SYSTEM 

never injure, is always beneficial. The more of it, and the more 
active, so much the better. Foreign trade, as a whole, for a nation, 
is always a delicate operation, and for the benefit of any country, 
should be so regulated, as not to import more than is exported, 
taking all that goes and comes into consideration ; and the exports 
ought to be something in excess. Whether they can be too much 
m excess, is perhaps a question. There is a natural limit. In 
Great Britain, the average annual balance in favor of home, is usu- 
ally some tens of millions of dollars. This does not all appear 
from the usual display of her exports and imports. It comes in 
other ways; and if it comes, it is no matter how. Great Britain is 
the great capitalist of the world — owes nobody but herself, and 
everybody owes her, and must at least pay interest, as we do — 
except what we repudiate. Shame on this delinquency ! It is the 
subsidies of Great Britain, and her compensations, extorted from 
vanquished nations, which constitute one great item of her income. 
For the last fifty years she has been perpetually draining the here- 
tofore richest portion of the world — the East — where gold was 
piled up in heaps, and silver was as stones. Was not China beaten, 
and forced to pay? — the Seikhs, and forced to pay ? The national 
debt of Great Britain, all owned at home, is no otherwise a diffi- 
culty with the government, than the financial task of raising more 
money to pay interest. The nation, as a whole, is no poorer on 
that account. In the United States, under the tariff of 1S42, the 

there are no certain data by which to determine what portion of this is the subject 
of home trade, it may, perhaps, be safely put at $1,000,000,000, less or more. The 
amount, then — allowing $200,000,000 for imports and exports — is ten to one of 
that which is the subject of foreign trade. Its comparative importance, however, 
is indefinitely, but vastly greater, than would be represented by this difference. 
That which is exported, is the subject of one commercial transaction, but ever 
after dead to the country : whereas, a large portion of that which remains, enters 
into the substantial capital of the country, and becomes reproductive, in endless 
progression, and by a ratio not exceeded by the geometrical. 

The same is true of other countries. The internal industry of France, for 1842, 
was estimated at 8,000,000,000 francs, and her exports at 1,065,400,000 — the ex- 
ports being less than one eighth of the productive industry of the country. And in 
relation to Great Britain, the great commercial nation of the world, whose manu- 
factures have been nurtured for centuries, and whose commercial marine is by far 
the greatest of all other nations, the Hon. Edward Everett, while our minister at 
the court of London, stated, at an agricultural meeting in Derby, England, in 1843, 
Earl Spencer in the chair, that, although the commerce between Great Britain and 
the United States was twice as great as between England and any other country, 
yet the whole of the products passing to and fro, was not worth so much as the 
oats and beans raised in Great Britain, as proved by their own agricultural statis- 
tics; and that the entire value of the products employing British navigation, all 
the world over, was not equal to tliat of the grass grown in Great Britain. 



ON THE HOME TRADE. 477 

balance in our favor had got to be some six or seven millions aver- 
age — just enough to save us from commercial bankruptcy in for- 
eign trade. But in domestic trade, there is no such delicacy — no 
such danirer. The more work there is done on an estate, the bet- 
ter ; and the United States is only a large freehold. 

The coasting trade, as appears from official documents, employs 
about half the tonrage of the country. And when the short and 
frequent voyages of this part of our commercial craft are consid- 
ered, as compared with the part engaged in foreign commerce, the 
business it does in the home trade must be many times greater than 
the foreign.* 

* From the official records of Massachusetts, it appears, as stated by Mr. Hud- 
son, in his speech in Congress, June 29, 1846, that — 

" The number of vessels which entered the port of Boston alone, in 1845, 
from other ports of the United States, beyond the bounds of Massachusetts — not 
counting fishing-craft, nor the wood, lumber, and hay coasters, trora Maine — was 
5,481, with an aggregate of 900,620 tons, or nine tenths of all the registered ton- 
nage of the country. Of these, 170 were from New Orleans, 39 from Mobile, and 
35 from Florida — making 244 from the gulf of Mexico. These 244 vessels, with a 
register of 1 18,600 tons, brought into the city of Boston, from the quarters mentioned, 
cotton, flour, corn, hemp, hides, feathers, lead, beef, pork, ham, lard, sugar, mo- 
lasses, staves, tallow, wood, and tobacco, to the amount of $9,500,000 — not to 
speak of grass-seed, castor-oil, linseed-oil, beeswax, furs, peltry, beans, peas,wheat, 
corn-meal, whiskey, buffalo-robes, copper, iron", leather, butter, and a great vari- 
ety of other articles of domestic growth, amounting to millions. This includes 
only the freight from the gulf to Boston. If we add the freight from Bos- 
ton to the gulf, and all the foreign products which were transported both ways, 
which are not included in the above estimate, it would amount to more than one 
fourth of our whole export to all foreign parts. The internal trade which comes 
to the Atlantic through the Hudson river, is equal to nearly half of our 
foreign commerce. The freight brought to the Hudson, in 1845, by the Erie and 
Champlain canals, was valued at $45,454,000, and the amount which entered 
these canals, at Albany and Troy, amounted to $55,454,000 — showing a total of 
$100,908,000, being more than all exports to foreign nations, for the same year, of 
the growth or produce of the United States. The transportation on the New York 
canals, in 1845, was 1,977,565 tons, being but 3 per cent, less than the whole 
amount of American tonnage which entered our ports the same year, from all for- 
eign ports." 

The following extract from an article in Fisher's National Magazine, September, 
1846, by Lot Clark, Esq., of Lockport, on the New York canals, is pertinent here : — 

" The tons of products and merchandise moved on the canals the past year, were 
1,977,565; the total tonnage clearing from all the ports of the United States, coast- 
ers and all, in the year 1844, as appears from the report of the secretary of the 
treasury, was 2,010,924 tons; the difference only 43,359 tons. The tonnage en- 
tering all the ports of the United States, was 1,977,438 tons, being twenty-seven 
tons less than the tons of movement on the canals. If we compare values, the con- 
trast is not less striking. The value of all the products and merchandise carried 
on the canals the year past, as appears from the trade and tonnage report of the 
commissioners of the canal fund, was $100,629,859; the whole amount of all the 
exports of products and merchandise from the United States, as appears by the sec- 



478 THE EFFECTS OF A PROTECTIVE SYSTEM 

To have a just idea of the short-route trade, constantly going on, 
one has only to observe the active movement of the people through- 
out the country, on errands of business. Nearly all this activity is 
trade. Bargains, or exchanges, all which are trade, are constantly 
going on between neighbors, for reciprocal benefit. It is stated in 
the National Magazine, that " on the Erie canal, for a number of 
years after it was finished, for the whole distance between Albany 
and Buffalo, the amount of merchandise carried ihrovgh^ was only 
about 2\ per cent, of the whole ; that about |§ths of the receipts 
were for goods or persons going but a portion of the distance, and 

retary's report for the year 1844, was $99,715,179; difference in favor of canal 
commerce, $914,680. Again, if we compare the tons moved on the canals with 
the tonnage entering and arriving at the port of New York, from and to all 
parts, we find how much greater is the canal navigation : In 1844, the tonnage 
cleared from New York, foreign and domestic, was 498,254 tons; and of all that 
entered that port was 576,480 tons; tola], 1,074,734 tons; being in all, 902,831 
tons less than was carried on the canals. Again, the total value of all the ex- 
ports from the city of New York, clearing from that port in 1844, to all places, 
was $32,891,540, while the value of the products carried to the tidewater on the 
canals the past year, was $45,452,321 ; so that whatever comparison you institute, 
you find that this internal navigation is by far the greatest interest of the state." 

It appears by Executive Doc, No. 19, 30th Congress, that the enrolled and 
licensed tonnage of the lakes, for 1841, was 56,252 tons; for 1846, 106,836 tons; 
and that the money value of the lake commerce, for 1841, imports and exports, was 
$65,826,022, and for 1846, $123,829,821; being an annual average increase of 
17 98-100 per cent. The total amount of merchandise, in tons, for 1841, was 
2,071,802, and for 1846, 3,861,088 tons; being an annual average increase of 17 
27-100 per cent. The Briiish tonnage on the lakes is about half that of the Ameri- 
can. To the above should be added the passenger trade, which Mr. Barton, of 
Buffalo, says, was not less than 250,000 persons, to and fro, in 1846, amounting, 
at $5 for each passenger, to $1,250,000. The lake commerce, increasing for ten 
years subsequent to 1846, as for five years preceding, at 17 per cent., will amount, 
in 1857, to upward of $170,000,000, net, or to $340,000,000 for imports and ex- 
ports. It should be observed, that sixteen of the lake ports are not included in 
the estimates for the above results, not being known. 

By the same document as above, it appears, that the steamboat tonnage for the 
Mississippi and its tributaries, for 1842, was 126.278 tons; and for 1846, 249,055 
tons. A Cincinnati memorial to Congress, of 1842, supposes there are 4,000 boats 
of other kinds (not steamboats) on these waters, with an average of 75 tons each, 
amounting to 300,000 tons. These are the flat-boat craft, which do not return; 
but it is supposed that two series of these boats are used in a year, raising their 
tonnage to 600,000, as stated by the document before us. The average of the 
steamboat running is put down at ten trips a year, which makes their joint freights 
1,262,780 tons; which, added to the above 600,000 tons by other kinds of boats, 
amounts to 1,862,780 tons for 1842. The yearly expense of this craft, building 
and repairing, is stated, for 1846, at upward of $20,000,000. The average annual 
increase of tonnage on these waters, from 1842 to 1846, was 24 3-10 per cent. 
The net money value of this trade, for 1846, through, way, passenger, and all, is 
stated at $183,609,725; or expv)rts and imports between places, $367,219,450. 
The latter is the true expression of the movement. 



ON THE HOME TRADE. 479 

either received or discharged at intermediate points between Alba- 
ny and Buffalo ; and that, although there is a new world open at 
the west since that time, and the amount of intercourse and busi- 
ness has become immense with the seaboard, yet, it is true at this 
moment, that the local business is still superior to the through husi- 
ness on that canal." The same, or like, is alleged of the passenger 
trade on the Hudson. From every point of the United States, 
where there are people, more start on business for five miles than 
for ten ; more for ten than for twenty ; more for twenty than fifty • 
and so on. This shows, that the great amount of home trade is 
imperceptible and incalculable. 

It can not but be seen, that this internal and coasting trade — of 
which the facts cited in the note are only very limited and restricted 
examples — running on lines which cross each other at all points, 
making a complete network of the whole land, to facilitate exchan- 
ges, must be vastly comprehensive, and not less important.* 

* It will be observed, that we have said little of our 5ea-coasting trade, except 
in the case of Massachusetts. We have not the sources of information at hand. 
But it is a great trade — many times to one of all our foreign commerce, as evinced 
by the daily arrivals and departures of coasting craft in our ports. They come 
and go in clouds. 

Adam Smith has well said on this subject : "An inland country, naturally fer- 
tile and easily cultivated, produces a great surplus of provisions beyond what is 
necessary to maintain the cultivators. Abundance renders provisions cheap, and 
encourages a great number of workmen [artisans] to settle in the neighborhood, 
who find that their industry can there procure them more of the necessaries and 
conveniences of life than in other places. They work up the materials of manu- 
facture which the land produces, and exchange their finished work, or what is the 
same thing, the price of it, for more materials and provisions. They give a new 
value to the surplus part of the rude produce, by saving the expense of carrying it 
to the water side, or to some distant market; and they furnish the cultivators with 
something in exchange for it, that is either useful or agreeable to them, upon easier 
terms than they could have obtained before. The cultivators get a better price for 
Iheir surplus produce, and can purchase cheaper other conveniences which they 
have occasion for. They are thus both encouraged and enabled to increase this 
surplus produce, by a better improvement and better cultivation of the land; and 
as the fertility of the land had given birth to the manufacture, so the progress of 
the manufacture reacts upon the land, and increases still further its fertility. The 
manufacturers first supply the neighborhood, and afterward, as their work im- 
proves and refines, more distant markets." In this way he goes on to account for 
the growth of all the manufacturing towns of England. Is not this remarkable 
doctrine for one who is relied upon for a system of economy directly the opposite 
of this ? 

But again he saj-s : "The inland, or home trade, the most important of all — 
the trade in which an equal capital affords the greatest revenue, and creates the 
greatest employment to the people of the country," &c. — "A capital employed in 
the home trade, will sometimes make twelve operations, before a capital employed 
in the foreign trade has made one. If the capitals are equal, therefore, the one 



480 THE EFFECTS OF A PROTECTIVE SYSTEM 

The Hon. Abbott Lawrence, in a letter to the Hon. William C. 
Rives, of Virginia, dated Boston, January 16, 1846, says: "We 
[of Massachusetts], previous to the war of 1812, were an agricul- 
tural and navigating people. The American system [the protective 
policy] was forced upon us, and was adopted for the purpose of 
reating a home market for the products of the soil of the south 
and west. We resisted the adoption of a system, which, we hon- 
estly beUeved, would greatly injure our navigation, and drive us 
from our accustomed employments, into a business we did not un- 
derstand. We came into it, however, reluctantly, and soon learned, 
that, with the transfer of our capital, we acquired skill and knowl- 
edge in the use of it ; and that, so far from our foreign commerce 
being diniinisJied, it was increased ; and that our domestic tonnage 
and commerce were very soon more than quadrupled." 

will give four-and-twenty times more encouragement and support to the industry 
of the country than the other." 

And yet again : " The greatest and most important branch of the commerce of 
every" nation, it has already been observed [this is a great point in his work], is 
that which is carried on between the inhabitants of the town and those of the 
country. The inhabitants of the town draw from the country the rude produce 
which constitutes both the materials of their work and the fund of their subsist- 
ence; and they pay for this produce by sending back to the country a certain por- 
tion of it manufactured and prepared for immediate use. The trade which is car- 
ried on between these two sets of people, consists ultimately in a certain quanlit) 
of rude produce exchanged for a certain quantity of manufactured produce. . . 
Whatever tends to diminish, in any ccmntry, the number of artificers and manufac- 
turers, TENDS TO DIMINISH THE HOME MARKET, THE MOST IMPORTANT OF ALL 

MARKETS, for the rude produce of the land, and thereby still further to discourage 
agriculture. Those systems, therefore, which, preferring agriculture to all other 
employments, in order to promote it, impose restraints upon manufactures, and for- 
eign trade, act contrary to the very end which they propose, and indirectly discour- 
age that very species of industry which they mean to produce." 

This, as can not be denied, is pretty strong and decided. It is always safe to 
leave the argument for Protection in Adam Smith's hands, when he is going on in 
his natural way. He can ^lot help speaking the truth, and the whole truth; 
though he does not seem to have felt himself in court, and under oath, to speak 
nothing but the truth. He had masters to serve, who fed and clothed him, as 
shown in another chapter, and for their great political designs, he was occasion- 
ally compelled, as may be believed, to violate his conscience, not less than his prin- 
ciples. 



ON THE COTTON-GROWING INTEREST. 481 



CHAPTER XXX. 

THE EFFECTS OF A PROTECTIVE SYSTEM ON THE COTTON- 
GROWING INTEREST. 

The Reasoning: of a Secretary of the Treasuiy. on the Cotton -Growing Interest, consid- 
ered. — The Importance of this Interest as compared with others. — The "Forty-Bale 
Theory " — A Variety of instructive Statistics on the Cotton and other Interests of the 
Country. — The Claims of the Cotton Interest, as heing one of superior Political impor- 
tance, examined. — The Profits of Cotton Growers and Manufacturers compared. — -The 
Evidence of Mr. Clay and the " Southern Planter" on this Point. — Table of Prices of 
Cotton from 1790 to 1844. — A Protective System more important to the Cotton-Growing 
Interest than to any other. — A remarkable and decisive Mode of Proof. — Action of a 
Convention of Miasissippi Cotton Planters on the Subject. 

The secretary of the treasury, in his annual report of Decem- 
ber, 1845, said, " The cotton-planting interest suffers from the 
tariff [of 1842] in the double capacity of consume?' and exporter ^ 
This theory will be easily apprehended by a perusal of the follow- 
ing extracts from a speech of Mr. Clay, in the senate, February, 
1832 :— 

" It is alleged that the import duty Is equivalent to an export 
duty, and falls on cotton. The framers of our constitution, by 
granting the power to Congress to lay imposts, and prohibiting that 
of laying an export duly, manifested that they did not regard them 
as equivalent. Nor does the common sense of mankind. An ex- 
port duty fastens upon, and incorporates itself with, the article on 
which it is laid. But an import duty on a foreign article leaves 
the exporter of the domestic article free — first, to import specie; 
secondly, goods which are free from the protecting duty ; or thirdly, 
such goods as, being chargeable with the protecting duty, he can 
sell at home." 

Again : " The case has been put in debate, and again and again 
in conversation, of the South-Carolina planter, who exports one 
hundred bales of cotton to Liverpool, exchanges them for one hun- 
dred bales of merchandise, and when he brings them home, being 
compelled to leave at the customhouse forty bales in the form of 
duties. The arrangement is founded on the assumption that a duty 
of 40 per centum amounts to a subtraction of forty from the one 
hundred bales of merchandise. The first answer to it is, that it 
supposes a case of barter, wliich never occurs. If it be replied, 
31 



482 THE EFFECTS OF A PROTECTIVE SYSTEM 

that it nevertheless occurs in the operations of commerce, the an- 
swer would be, that, since the export of Carolina cotton is chiefly 
made by New York or foreign merchants, the loss stated, if it re- 
ally occurred, would fall upon them, and not upon the planters. 

*' But, to test the correctness of the hypothetical case, let us 
suppose that the duty, instead of 40 per centum, should be 150, 
which is asserted to be the duty in some cases. Then, the planter 
would not only lose the whole hundred bales of merchandise, which 
he had gotten for his hundred bales of cotton, but he would have 
to purchase, with other means, an additional fifty bales, in order to 
enable him to pay the duty accruing on the proceeds of the cotton ! 
Another answer is, that if the producer of cotton in America ex- 
changed against English fabrics, pays the duty, the producer of 
the fabrics also pays it, and then it is twice paid. Such must be 
the consequence, unless the principle is true on one side of the 
Atlantic, and false on the other. The true answer is, that the ex- 
porter of an article, if he invests his proceeds in a foreign market, 
takes care to make the investment in such merchandise as, when 
brought home, he can sell with a fair profit." 

When a doctrine or theory — for this is nothing but a theory — 
is proved absurd, as above, that is enough. No reasoning can 
stand before a plain, palpable absurdity, like this. The cotton- 
planter usually sells his cotton, out and out, to a New-York broker, 
or to a merchant somewhere, at the market price, puts the money 
in his pocket, and there it is. But this theory supposes it is not 
there. Or, that, by some unaccountable process, 40 per cent, of 
it is afterward abstracted. If the planter, having the money for 
his cotton once in his own desk, lets a part of it go, it must be his 
own fault. There is no such thing as barter in these transactions. 
The exporter of cotton pays the cotton-grower cash, and if he 
imports merchandise with its proceeds, instead of cash, it is be- 
cause he expects more cash in the end, by profits on his imports, 
duties or no duties. 

But admitting the truth and validity of the "forty-bale theory," 
or of what the secretary of the treasury calls '* cotton suffering in 
the double capacity of consumer and exporter" — it would be hard 
to believe it — but admitting it, it has been demonstrated in another 
part of this work that protective duties in this country are not taxes, 
in the operation of the system, to any party or person ; that pro- 
tected articles of manufacture are generally cheaper — in the ag- 
gregate always cheaper ; and that the system relieves the people 



ON THE COTTON-GROWING INTEREST. 483 

from a heavy burden of foreign taxation. Then where is this 
*' suffering," this loss to be found ? It has vanished ; it is turned 
into a positive gain, in all cases, and with all parties in the coun- 
try — producers, consumers, buyers, sellers, exporters, and im- 
porters. And thus the whole theory falls to the ground. 

It was on the basis of this theory that nullification rose in 1832 
— disturbed the repose, and menaced the integrity of the Union. 
The South-Carolinians were made to believe that they were taxed 
millions a year, "in the double capacity of consumers and export- 
ers." Mr. Clay, in his reply to General Hayne, in February, 
1832, proved very satisfactorily, that, on their own principle, their 
tax, as a state, could not exceed $333,000, which was only about 
one third of their fair proportion of the public burden, when the 
revenue from customs was twenty-five millions. But even this 
burden is removed by the proof that protective duties are not taxes. 

That the cotton-growing interest is one of great importance, both 
to the country and to the world, is evident enough ; and those 
things which make it important to the world, all contribute to make 
it valuable to those concerned in it. But the following statement 
of the secretary of the treasury on this point, in his annual report 
for December, 1845, deserves a qualification and some abatement, 
in several particulars : — 

*' Cotton is the great basis of our foreign exchange, furnishing 
most of the means to purchase imports and supply the revenue. 
It is thus the source of two thirds of the revenue, and of our for- 
eign freight and commerce, upholding our commercial marine and 
maritime power. It is also a bond of peace with foreign nations, 
constituting a stronger preventive of war than armies or navies, 
forts or armaments. At present prices, our cotton-crop will yield 
an annual product of $72,000,000, and the manufactured fabric 
$504,000,000, furnishing profits abroad to thousands of capitalists, 
and wages to hundreds of thousands of the working classes, all of 
whom would be deeply injured by any disturbance, growing out 
of a war, to the direct and adequate supply of the raw material. 
If our manufacturers consume 400,000 bales, it would cost them 
$12,000,000, while selling the manufactured fabric for $84,000,000 ; 
and they should be the last to unite in imposing heavy taxes on that 
great interest, which supplies them with the raw material, out of 
which they realize such large profits." 

The most impressive feature of the above passage, from the re- 
port of the secretary of the treasury, is the sympathy and concern 



484 THE EFFECTS OF A PROTECTIVE SYSTEM 

which he seems to manifest for British capitalists and laborers, as 
contrasted with his feelings toward American capitalists and labor- 
ers. To the former he is more than courteous ; to the latter, here 
and throughout the report, he is somewhat severely censorious. 
It is not a little remarkable that he should be able so clearly to see 
the dependence of these "hundreds of thousands" of British "work- 
ing classes" on their position, in connexion with their employers, 
and that he should so feelingly deprecate " any disturbance" of 
that position, by which they might be " deeply injured ;" and yet 
not be able to see the importance of not disturbing the same posi- 
tion of American laborers. The secretary seems to have great sat- 
isfaction in contemplating the growing wealth of British capitalists, 
and is apparently ready to vindicate their utmost prerogative. The 
slightest exposure of the British "working classes" to injury, very 
sensibly affects him. This does not appear to be the charity that 
begins at home, but that which roams abroad for beneficiaries. 

Could he not think what would be the benefit to American la- 
bor — without injury but a benefit to the cotton-growing interest, 
as shown in another part of this chapter — if 50 per cent, of the 
raw cotton exported were manufactured in this country, thereby 
retaining the six additional values bestowed upon it, not less than 
$200,000,000, instead of retaining only the $84,000,000? — The 
market or demand, for both the raw cotton and its fabrics, would 
still be the same— even greater. As to the " heavy taxes on this 
great interest," which the secretary deprecates, it has been many 
times answered in this work. If such a monomania were not a 
calamity to more parties than one, it would be ludicrous enough. 

In the next place, the value of the cotton-crop in this statement 
is hypothetical, and too high. According to the secretary's own 
tables, the export of that year was only $51,739,643; and the 
average annual export from 1841 to 1845, inclusive, was only 
$51,000,000. Add $12,000,000 for home consumption, accord- 
ing to his statement, and it would be only $63,000,000, instead of 
$72,000,000. 

But this is here presented by the secretary as a great interest. 
There are several agricultural products of the country of greater 
value than that of cotton. That of hay, in 1844, by the patent- 
office report, was upward of 17,000,000 tons, which, at $10, would 
be $170,000,000. Indian corn, in 1844, was 422,000,000 bush- 
els ; in 1843, it was 494,000,000; and in 1846, probably over 
500,000,000 : which, at 50 cents a bushel, would be $250,000,000. 



ON THE COTTON-GROWING INTEREST. 485 

Neat cattle, in 1840, numbered 15,000,000 ; now (1847) not less, 
probably, than 20,000,000 : at SlO a head, $200,000,000. Swine 
in 1840, 26,000,000 ; say 30,000,000 now : at $4 a head, $120,- 
000,000. Horses and mules are estimated at $170,000,000. 
Oats, 172,000,000 bushels : at 25 cents, $63,000,000. Hemp 
and flax, $20,000,000; products of the dairy, $34,000,000, &c., 
&c. The Hon. Mr. Stewart, of Pennsylvania, has estimated the 
annual agricuhural products of the country at $1,000,000,000, 
which the above items, being only a few of all, though the largest, 
would seem to justify ; and a senate document, cited in another 
chapter, based on the census of 1840, estimates the entire annual 
product of the industry and labor of the country at $2,000,000,000. 
It is easy to see what proportion the annual product of cotton — 
average say $60,000,000 — bears to that of the entire labor of the 
country ; or to the aggregate of agricultural products; or to either 
of the above items for a single branch of agriculture, six of which 
are larger, and some very much larger, than tliat of cotton. Why 
did not the secretary name some of these as great interests ? x\nd 
why should the smallest interest, even of a single man, in the gen- 
eral aggregate, be overlooked ? That is the best government which 
has a care for all. 

But the secretary ascribes some very pretending political attri- 
butes to the cotton interest, for which he seems to think it merits 
the special care of the government. " Cotton is the great basis of 
our foreign exchanges, furnishing most of the means to purchase 
imports, and supply the revenue. It is thus the source of two 
thirds of the revenue, and of our foreign freight and commerce, 
upholding our commercial and maritime power. It is also a bond 
of peace with foreign nations, constituting a stronger preventive of 
war than armies or navies, forts or armaments." 

It can not be denied that this is a high pretension, an extraordi- 
nary claim, put forward on the basis of eminent political consider- 
ations ; and these, apparently, are some of the reasons why the 
secretary thinks that all other interests of the country should give 
way to that of cotton, and that the public policy should be shaped 
for this. Believing in these facts, as he has stated them, his course 
as a public officer may be easily explained. How could he do 
otherwise ? 

But if, after all, it shall appear that the position of this interest 
of $72,000,000, so far as its claims to protection are concerned, 
is purely a commercial one ; that it is an interest of so many dol- 



486 THE EFFECTS OF A PROTECTIVE SYSTEM 

lars, and no more, in the pockets of the growers of cotton ; that so 
far as it has any political importance, it is so much additional com- 
mercial value to those concerned in it, and therefore can only be 
regarded as a basis of commercial speculation — and a very strong 
one it is ; then what becomes of these high and superior claims set 
up for it ? 

As to the political importance of the cotton interest, in maintain- 
ing peace, whatever of truth there is in it — and there is doubtless 
a good deal — nevertheless, it all redounds to the commercial ad- 
vantage of that interest, rendering it always more secure, more 
available, more productive. As to the credit claimed for the cot- 
ton interest, in affording the basis for two tliirds of the public rev- 
enue, the fact is not apparent. England Diust have the cotton, and 
the planter is glad to sell it. These are facts. But why does the 
exporter of the cotton bring back merchandise? Because the peo- 
ple want it, and because he can double his profits by the operation. 
It is the wants of the people, then, that constitute the basis of the 
public revenue, and not cotton. If it should be said, the cotton 
pays for the merchandise, to the extent specified, this fact is not 
inconsistent with another contingent one, to wit, that in the absence 
of cotton, something else would be found to pay for it. As to the 
aid of cotton in providing a maritime force, by employing a com- 
mercial marine, that, too, rests on a similar foundation to the other 
pretension ; and if it should be granted, would it not be fair to bal- 
ance the account, and bring the cotton interest in debt to the coun- 
try, by charging back upon it five or six millions a year for the 
expense of a navy to protect it on its passage to market ? 

No doubt cotton is a great interest. Nor is it intended to dis- 
parage its fair relative importance, though not the greatest of the 
Union. But it can hardly be allowed to claim that every other 
interest of the country should make obeisance to that, crouch to it, 
be its slave, be sacrificed to its advantage. Unfortunately, the 
course of public policy proposed for the benefit of the cotton-grow- 
ing interest is as bad for that as for any other, not to say worse. 
All are to be injured by a mistake of the advocates of tliis single 
interest, they suffering with the rest. 

The president of the United States, in his annual message of 
1845, as before cited for another purpose, said : •' While it [the 
tariff of 1842] protects the capital of the wealthy manufacturer, 
and increases his profits, it does not benefit the operatives or labor- 
ers in his employment, whose wages have not been increased by 



i 



ON THE COTTON-GROWING INTEREST. 487 

it." How far the last part of this proposition is true, has been be- 
fore considered. The secretary of the treasury, in his annual re- 
port of the same year, said : *' The profit of capital invested in 
manufactures is augmented by the protective tariff." It may be 
so, ought to be, doubtless is, as one object of the tariff is to en- 
courage and sustain manufactures. But the secretary maintains 
that this is done at the expense of laborers and the poor. 

So serious an allegation as this, involving so important a ques- 
tion, and emanating from such a quarter, should have been sub- 
stantiated by the evidence o( facts. There can be no apology for 
this defect of duty, inasmuch as it was perfectly in the power of 
the secretary to prove it, if it was true. He did, in fact, open a 
correspondence in all quarters for that purpose ; and yet, not a sin- 
gle fact to the point is forthcoming. He complains that the man- 
ufacturers would not give evidence to convict themselves. But 
there were thousands of disinterested and well-qualified persons 
whom he might have put under oath. Their certificates would 
have been influential, for or against the secretary. The fact that 
he did not produce them, is the strongest evidence that they could 
not be obtained for his imrpose. 

The secretary does indeed say : " It seems strange, that while 
the profit of agriculture varies from 1 to 8 per cent., that of manu- 
factures is more than double." This, certainly, is a very equivo- 
cal mode of expression, unexplained. If he means that the profit 
of manufactures is more than double of 1, that is not saying much. 
Or if he means that it is more than double of the medium between 
1 and 8, that is, of 4 — it is perhaps fair to conclude this was his 
meaning — even that is not very extravagant, and is probably about 
what he meant to allow for agriculture. But whatever he meant, 
is unsupported by evidence. 

Assertion is at least as good on one side as the other, and when, 
in replication, it happens to correspond with known facts, it is sim- 
ply a reference to the most valid evidence — is evidence. It will 
not be denied that more capital has been sunk, entirely and for 
ever lost to the original stockholders, in starting manufactories in 
the United States, than in any other business whatsoever. Nearly 
all that was invested during the war of 1812, and under the tariff 
of 1816, down to 1824, was sacrificed ; and the amount was very 
great. Hundreds, not to say thousands, of families, who were rich 
before their all was thus hazarded, were for ever ruined by these 
misfortunes. It is not less true that, in the history of manufactur- 



488 THE EFFECTS OF A PROTECTIVE SYSTEM 

ing in the United States, down to this time, frequent failures, some 
for great amounts, have been constantly taking place. On these 
ruins, others following, and taking the same establishments, at a 
large discount on the cost — 50 or 75 per cent., sometimes more, 
sometimes less — have, for a season, been able to make large div- 
idends, not on the first cost, but on the last. What was their good 
Juck, had been the ruin of others. In the same manner, handsome 
profits have sometimes been realized by the first establishments in a 
new business, till other capital, waiting for employment, rushed 
into it, and reduced the profits to an unsatisfactory level, as is gen- 
erally the result in all such cases, till one reaction after another 
brings it to a moderate and fair business. 

The Hon. Mr. Evans, of Maine, whose scrupulosity and accuracy 
of statement in such matters were never questioned by his opponents 
in the senate of the United States or elsewhere — much less are 
his statements often disturbed — replied to Mr. M'Duffie, of South 
Carolina, on this point, in a speech delivered January 23, 1844. 
His conclusion was : " I venture to affirm that the profits of capital 
invested in cotton manufactures [these are the most profitable] from 
the commencement to this time, have not averaged 6 per cent." 
Mr. M'Duffie asked, *' What are they now?" — "I can not cer- 
tainly inform the senator," said Mr. Evans ; " but I am assured 
that, altogether, they will not average 12 per cent." It has been 
since proved that they did not average so much ; and it is doubt- 
less true that '* they have not averaged 6 per cent, from the com- 
mencement." No others have done so well, and some have suf- 
fered great disasters. 

The Lowell factories have, undoubtedly, done better than the 
average of cotton-mills in the country. The Hon. Nathan Apple- 
ton states that, of the nine companies there, five made no dividend 
during the year 1842, and that the average of the dividends of all 
the Low^ell companies, for the years 1842, 1843, 1844, and 1845, 
of the net profits, was 10^ per cent, per annum. These statements 
are, of course, open to verification, and if they could be proved 
incorrect, it would have been done, as there was no want of dispo- 
sition. 

*'I am very sure," said Mr. Evans, "that in other branches of 
manufacture much less [profit] still has been derived. How is it 
with woollens? The profits there, we know, have been very low; 
great losses have been sustained ; and the stock has been, generally, 
far under par. In the iron business, the senator from Pennsylva- 



ON THE COTTON-GROWING INTEREST. 489 

nia [Mr. Buchanan] has told us that many of the furnaces have 
ceased to operate. . . With plain and conclusive facts like these," 
said INIr. Evans, "with what justice or propriety can the act of 
1842 be stigmatized as an act to legalize plunder and oppression 
[so Mr. M'Duffie called it], or the policy, as a policy to enrich the 
manufacturer and capitalist at the expense of the laborer? These 
are charges, sir, easily made ; but they are not sustained, and can 
not be sustained by any proof drawn from experience, or the prac- 
tical operation of the system." 

But what are the profits of the cotton-growers? In Mr. Clay's 
reply to General Hayne, in February, 1832, he said : — 

" The cotton-planters of the valley of the Mississippi with whom 
I am acquainted, generally expend about one third of their income 
in the support of their families and plantations. On this subject I 
hold in my hand a statement from a friend of mine, of great accu- 
racy, and a member of the senate. According to this statement, 
in a crop of $10,000, the expenses may fluctuate between $2,800 
and $3,200." Again : " If cotton-planting is less profitable than 
it was, that is the result of increased production. But I believe it 
to be still the most profitable investment of capital of any branch 
of business in the United States ; and if a committee were raised, 
with power to send for persons and papers, I take it upon myself 
to say, that such would be the result of the inquiry. In Kentucky, 
I know many individuals who have their cotton plantations below, 
and retain their residence in that state, where they remain during 
the sickly season ; and they are all, I believe, without exception, 
doing well. Others, tempted by their success, are constantly en- 
gaging in the business, while scarcely any come from the cotton 
region to engage in western agriculture. A friend, now in my 
eye, a member of this body, upon a capital of less than $70,000, 
invested in a plantation and slaves, made, the year before last, 
$16,000. A member of the other house, I understand, who, with- 
out removing himself, sent some of his slaves to Mississippi, made, 
last year, about 20 per cent. Two friends of mine, in the latter 
state, whose annual income is from $30,000 to $60,000, being de- 
sirous to curtail their business, have offered [cotton] estates for 
sale, which they are ready to show by regular vouchers of receipts 
and disbursements, yield 18 per cent, per annum. One of my 
most opulent acquaintances, in the county adjoining thai in which I 
reside, having married in Georgia, has derived a large portion of 
his wealth from a cotton estate there situated." 



490 THE EFFECTS OP A PROTECTIVE SYSTEM 

The Richmond (Va.) Enquirer, of Nov. 13, 1846, says: '' Our 
negroes are going by hundreds, yea, thousands, to the southwest. 
The domestic can not compete with the southwestern demand for 
them, for the plain reason, that the tobacco-grower can not make 
one half of one per cent, per annum upon slave labor, while the 
cotton and sugar planters make, perhaps, from fifteen to twenty per 
cent." 

So far as this evidence goes — and it is large and comprehensive 
— it proves a great deal ; proves what agrees with common report 
and observation, viz., that cotton-planting has been one of the most 
lucrative, money-making pursuits in the United States; that fortunes 
have been made quick and easy by it; that it has been uniformly 
profitable; that vast estates have been amassed in this calling; that 
men have grown so suddenly and greatly rich as to be satisfied, and 
willing to sell out, when the business was worth 18 per cent. ; that 
it is a business which is not liable to fluctuation, and never fails; 
that the average profit can hardly be less than 20 per cent, on the 
capital invested, when it has, probably a long time and extensively, 
been very much better than that ; that, if prices have fallen from 
the enormous profits of former years, it has been owing to the nat- 
ural tendency of capital where so much money could be made, 
resulting in over-production ; and that the business is still one of 
the best in the whole country. All but the last of these statements 
are verified by Mr. Clay's evidence ; and for the last, to wit, that 
this business is still the best, it is now proposed to introduce a wit- 
ness whose evidence, considering the quarter from which it comes, 
as well as for its forcible and convincing character, will, perhaps, 
be somewhat surprising. 

In 1844, Leavitt, Trow, & Co., New York, published a book 
entitled, " Notes on Political Economy, as applicable to 
THE United States, by a Southrn Planter." Among the 
many instructive things contained in it (it was written by a master- 
hand), are the following: — 

" Let us now calculate what cotton can be grown for when prices 
get down to mere support for master and slave. With the proper 
economy, by the owner living on his place, deriving his household 
and table expenses from it, and clothing and feeding his own slaves, 
his annual expenses, consisting of salt, iron, medicine, taxes, wrap- 
ping for his cotton, and overseer's wages, do not exceed 2 cents a 
pound on the product or crop. All over that is a profit in their 
sense, that is, over and above annual expenses. I will give the 



ON THE COTTON-GROWING INTEREST. 491 

details to make this clear. A plantation of fifty hands makes the 
average of seven bales to the hand, weighing four hundred and 
6fty pounds. This is three hundred and fifty bales. Suppose 2 
cents for expenses. This amounts to $3,150 on the crop. This 
crop, say, sells for 4 cents a pound, net, and, clear of charges for 
transportation, insurance, and commission for selling, leaves $3,150 
profit for the luxuries of the owner, who gets his necessaries out 
of the plantation by living on it. This is a very pretty sum ; and 
half of it would be ample for him, which would reduce cotton to 
three cents. As to insurance, unfortunately, the slaves not only 
insure themselves, but give a large increase, which grows up with 
the owner's children, and furnishes them with outfits by the time 
they need them. Now, I will go into a calculation to show that 
two cents a pound cover the annual expenses. Here follow the 
items, taking a plantation of fifty hands as a basis : For overseer, 
$500; for salt, $20; iron, $30; medicines, $20; doctor's bill, 
$100, for you can contract by the year, and it is ofien done, at $2 
a head ; bagging and rope to wrap it at 12j cents for the one, and 
5 cents for the other, amounts to $300; taxes, $100 ; sundry small 
things, $100 ; all told. The writer speaks from experience, for 
he is a planter of cotton, and owns slaves. All this amounts to 
$1,170, much below the allowance of 2 cents a pound, amounting, 
as we have seen, to $3,150. I only wish to show, that we can grow 
cotton for 3 ce7its a found, and have a, living jprojit. . . The cot- 
ton culture, then, is sure to go on in this country, at any price, from 
3 cents up, that the market warrants, and with increased energies. 
These facts warrant us in asserting, which we do broadly and un- 
qualifiedly, that we can grow cotton cheaper than any other people 
on earth, not even excepting the Hindoos. The consequence of 
this will be, that we will take the market of the world, and keep it 
supplied with cotton. . . I am not speaking hypothetically, when 
I say the United States can grow all the cotton wanted — have 
slaves and land enough to do it, and even overdo it. [This was 
written before there was any serious expectation of the annexation 
of Texas.] This country can raise 3,000,000 of bales, when that 
much is wanted, and then keep ahead of the consumption far 
enough to -prevent any advance in the price. . . If we keep cotton 
down, not to its minimum price, but to five or six cents, it will 
cease to come around the cape of Good Hope, and the United 
States will have the market of the world, just as certainly as at three 
cents. . . England can not decline taking our cotton, because it is 



492 THE EFFECTS OF A PROTECTIVE SYSTEM 

cheapest, and because she has built up her manufactories on the 
minimum price of the raw material, and buys it wherever cheapest, 
and has conformed all prices of labor and goods to that principle. 
She has, in France and Germany, as well as in us, rivals to her 
cotton manufactures, and such skilful rivals, too, that she dare not 
pay more for the raw materials than they do. If she were to pay 
two cents a pound more for cotton than we do, or than the continent 
of Europe does, she would lose her hold on the cotton manufac- 
ture, and her opponents would take her markets. The Jialf- 
'penny-a-iwund duty now levied in England will have to give way to 
insure her success. [This duty was taken off in 1845, the next 
year after this remarkable prediction was uttered.] . . According 
to the opinions of our most deserving and most skilful commission 
merchants and factors, our own [American] spinners are now worth 
fully two cents a pound to the cotton market, each and every year, 
by the competition they create with the Europeans. . . Fears have 
been expressed that, should we get under way by the stimulus of 
a protective tariff, we would not only pass the dead point, but go 
ahead beyond our own consumption, so as to aim at supplying the 
whole world with manufactures. Such arguments cut like two- 
edged swords, and show how much might be done under protec- 
tion." 

The above extracts are a little more comprehensive than what is 
strictly pertinent to the point of the comparative profits of manu- 
facturing and cotton-growing. Nevertheless, they exhibit some 
practical suggestions of great importance relative to the subject. 
One of them is a maximum price of cotton, five to six cents, that 
will be best for the country, though not, perhaps, for individual 
growers, except as it might prove to be their interest thus to com- 
mand the m^arket of all the world. It is clear that the prices can 
not be kept up as high as they have been, so long as the business 
is so profitable, and so attractive to capital. It may, therefore, be 
better for each, as it would be better for the aggregate interest, that 
prices should come down to that point, which will secure an ex- 
clusive market in all quarters. The idea suggested by this writer, 
that, in such a case, it would be policy to prevent the rise of prices 
above that point, is doubtless repugnant to the complaint, that they 
have already fallen too low. But it will be hard to disturb his 
reasoning. The clearness with which he has set forth the position 
of England, in her absolute dependence on American cotton, will 
be appreciated. It will be seen that it disposes of the argument 



ON THE COTTOX-GROWING INTEREST. 493 

that England would purchase less of American cotton under an 
American protective system, and proves that she vi^ould rather be 
forced to purchase more, to keep her own markets, which would 
be exposed to American and other competition. In any case, these 
rival interests would necessarily enlarge the field of demand for 
manufactured cottons, and the world must be supplied, which 
necessarily increases the demand for the raw material. With those 
who wish to sustain and raise the price of American cotton, the 
two-cents-a-j)ound sustaining power, imparted to it by American 
spinners — admitting the fact — could hardly be unwelcome to them ; 
and it will be difficult to avoid the conclusion, that the fact is so. 

With the facts afforded by the " Southern Planter," as to the ex- 
pense of raising cotton, it is only necessary to find what have been 
the prices of cotton, during the history of its production in the 
United States, down to the present time, and its price now, to have 
a just idea of the profits of the business. In a variety of instructive 
and useful statistics on cotton, published in the *' National Intelli- 
gencer," Sept. 8, 1846, which had been prepared with great care by 
a Virginia gentleman, is a column of the average price of cotton 
per pound, for each year, from 1790 to 1838, as follows in the note 
below.* 

Years. Cents. 

1823 10 and 12 

1824 15 



* Years. 
1790 


Cents. 
141 


Years. 
1807 


Cents. 
21^ 


1791 


26 


1808 


19 


1792 


29 


1809 

1810 

1811 


16 


1793 

1794 . . . 


32 

33 

361 

36| 

34 


16 

151 


1795 

1796 


1812 -. 

1813 


10^ 

12 


1797.. 


1814 

1815 


15 


1798 


39 


21 


1799...... 

1800 

1801 


44 

28 

44 


1816 

1817 

1818 


29| 

26i 

. . 34 


1802 


19 


1819 


24 


1803 


19 


1820 


17 


1804 

1805 

1806 


20 

23 

22 


1821 

1822 


16 

161 



1825 21 

1826 11 

1827 9Jl 

1828 lOi 

1829 10 

1830 10 

1831 9i 

1832 10 

1833 11 

1834 13 

1835 16^ 

1836 16| 

1837 14| 

1838 10| 



By a table in the report of the secretary of the treasury, 1845, on page 612, these 
average prices are brought down to 1844, inclusive. It begins with 1833 : — 
Years. Cents. Years. Cents. Years. Cents. 

1833 11 1837 14 1841 10 

1834 12 1838 10 1842 8 

1835 16 1839 14 1843 6 

1836 16 1840 8 1844 8 

The slight variation in six concurrent years, from 1833 to 1838, inclusive, in 



494 THE EFFECTS OP A PROTECTIVE SYSTEM 

There is enough in all this, to show, in connexion with the evi- 
dence of Mr. Clay, and the practical statements of the " Southern 
Planter," first, that cotton-growing in the United States, has been 
not only a very profitable business, down to this time, but by far 
the most profitable of any in the country; secondly, that it has 
never seen a day of adversity ; and thirdly, that it occupies a com- 
mercial position, in relation to the wants of mankind, and to the 
rest of the world, which, for an indefinite future period, apparently 
for ever, is very sure to command uninterrupted prosperity and 
great profits. 

And this is the interest which complains of the profits of manu- 
facturing, when the latter, in its best days, never did so well as 
cotton-growing in its poorest days ; when cotton-growing never 
failed — can't fail, except as the crop fails, and then the price, or- 
dinarily, will make it up — whereas, manufacturing has broken 
down many times — has sunk more money, and ruined more for- 
tunes, than has happened to any other interest in the land. 

But to show how a protective system operates on the cotton- 
growing interest of the United States, we beg leave to call attention 
to a method of proof and argument of a very remarkable character, 
and which, we think, will conclude all controversy on the question. 
It is contained in " a speech of Mr. Simmons, of Rhode Island, 
upon the resolutions to postpone the bill introduced by Mr. M'Duffie, 
of South Carolina, to reduce the duties on imports, delivered in 
United States senate, March 27, 1844," and will be found in the 
note below.* 

these two authorities, establishes at least the fidelity of the first, if it should sug- 
gest that there may have been a motive in the second (it was sent to the secretary 
from South Carolina, in answer to one of his circulars), for making the price as low 
as fairness would allow. Both are doubtless worthy of confidence, and in any case 
are accurate enough for the present purpose. 

It is proper to remark, that the higher prices of former years do not determine 
the question of comparative profits in the business at different times. The advan- 
tages of experience and sundry improvements, might make the prices of latter years 
more profitable than those of the former. The right of using Whitney's cotton- 
gin, was open to all in 1800. It will be seen that the prices have never yet come 
down to the maximum, five to six, which the " Southern Planter" thinks would be 
best for the interest, and that, for the last twenty of these years, from 1825 to 1844, 
inclusive, they amount to an average of 11 1-5 cents (taking the secretary's prices 
as far as they go), leaving nearly four times a living profit, which is three cents. 
The averaije prices of the first thirty-live years, from 1790 to 1824, inclusive, were 
twenty-four cents, or eight times the living profit of the present period. 

*"I will," said Mr. Simmons, "give a statement of the results of an exchange 
of one hundred bales of cotton in each country for heavy sheetings -the cheapest 
arlicla in his long list, substance considered: — 



ON THE COTTOX-GROWING INTEREST. 495 

We proceed to observe, that a protective system increases the 
demand for raw cotton, sustains, and tends to raise, its prices. 

Comparative Statement of the Effect of exchanging one hundred Bales of Cotton for 
brown Sheetings in England and the United States, at the ruling Prices in both 
Countries for Sheetings one Year ago, as quoted by Mr. M'JDiiffie's Tables, and 
for fair Cotton as quoted in Liverpool and American Price Currents at ihc same 
tim£ : — ■ 

Amount of sales in Liverpool of 100 bales of cotton 42,000 lbs. 

Draught 1 pound per bale, is 100 pounds 100 

Tare 4 pounds per cwt. on 375 cwt. is 1,500 — 1,600 

40,400 lbs. 

At4|i. per pound=8| cents $3,535 00 

Charges in the United States and Liverpool : — 

Bagging, twine, mending, and marking $14 50 

Wharfage, $4 ; cartage, $10 ; storage $8 22 00 

Fire insurance, $3.81 ; postage, &c., $3.50 7 31 

Marine insurance, 1 per cent, on $3,578.81 35 79 

Policy 1 25— $80 85 

Dock dues, £4 Os. 6c?. ; town dues, 16s. 8d.=X4 17s. 2d! 23 32 

Duty 35d. per cwt. on 360 cwt., 2 qrs., 24 lbs 252 50 

Cartage, porterage, and weighing, £3 14s. Id 17 78 

Canvass, twine, and mending, £2 9s 1 ! 76 

Warehouse rent. Id. per week for 12 weeks, £5. 24 00 

Postages and small charges, 10s. 6d 2 52 

Brokerage, ^d. per ct. ; insurance. Id. per ct. ; 3 mos. 10 ds. in- 
terest discount lid. = l^d. on £731 9s.2d.is£l3 16s. Id.. 66 26 

Freight, at id. per pound, on 40,400 lbs., is £84 3s. 4d 404 00 

Five per cent, primage on freight, £4 4s. 2d 20 20 

Commis'n and guaranty, 3 pr ct. on £736 9s. 2d., is £22 Is.lO^d. 106 05 

Three months' interest on cash charges, $974.70 14 62—1,023 86 

Net amount of proceeds, in Liverpool, of 100 bales cotton $2,51 1 14 

This amount of proceeds invested in best stout English sheet- 
ing, as quoted in Mr. M'Duffie's tables, at 3|rf.=7f cts.— 
per yard, is 30,859 yards $2,391 57 

Commission for purchasing, freight from Manchester to Liv- 
erpool, dock dues, &c., 5 per cent 119 57-$2,511 14 

The proceeds of 100 bales of cotton, invested in sheeting for planter's 

account, amounting as above to 30,859 yds. 

Deduct amount for freight, insurance, interest on the goods during voy- 
age from Manchester to the United States ; also, interest on cotton 
to Liverpool, and time it remained unsold there, and other charges of 
importation — 10 per cent 3,086 yds. 

Quantity of sheetings returned to the planter 27,733 yds. 

" Proceeds of the same quantity of cotton sold in the United States 
and invested in sheetings : — 

100 bales of cotton— 42,000 pounds— at 6| cents, is $2,730 00 

Bill of 43,750 yards of sheeting, at 6| cents, is $2,843 75 

Deduct 8 months* interest for cash 113 75— $2,730 00 



496 THE EFFECTS OF A PROTECTIVE SYSTEM 

And this must be evident from the foregoing facts and reasonings, 
though, as shown by the "Southern Planter," above cited, it may 

RESULT. 

" The one hundred bales of cotton pays for 43,750 yards of sheetings — cotton 
sold and sheetings bought in the United States. 

" The same cotton pays for 27,773 yards of sheetings — cotton sold and sheet- 
ings bought in England ; or, in other words, it is 57 per cent, in favor of the Ameri- 
can trade, if the goods are imported free. 

"It thus appears that the planter can get for his one hundred bales of cotton, in 
this country, a much larger amount (57 per cent, more) of equal goods than in 
England, without duty. 

"To see how it would affect the planter and the country, if the trade were in- 
creased as the senator proposes, foreigners made its agents in everything to aid 
them to purchase our cotton, and our manufactures abolished, I will consider the 
whole cotton crop sold in England, the proceeds converted into cotton goods for 
our consumption, and these imported free of duty in this country, and also at his 
proposed duty of 20 per cent. 

" This I illustrate by an example of one hundred bales, and also by one embra- 
cing a crop of two millions of bales : — 

Sales of one hundred Bales of Cotton in Liverpool, at Prices of February 3, 1844, 
and Proceeds invested in best English Sheeting at the English Prices, as per Ta- 
bles of Mr. M'Duffie, of January 31, 1843, and sold at the Prices of last Spring 
(1843), also per Tables of Mr. M'Duffie, with an .Addition of 25 per cent, for the 
Advance in Price of such Goods during the past Year, 

SALES OF 100 BALES COTTON. 

100 bales of cotton 42,000 lbs. 

Draught, 1 lb. per bale, 100 lbs. ; tare, 4 lbs. per cwt. on 375 cwt. 1,500 1,600 lbs. 

40,400 lbs. 

At bld.= 1 1| cents $4,646 00 

Deduct charges in United States and Liverpool, as per statement No. 1, 

annexed 1,023 86 



Net $3,622 14 

PURCHASE OF SHEETING. 

Invested in English sheeting at prices of 1843, with an advance of 25 
per cent, for rise since : — 

36,656f yds. of sheeting, called in England "stouts or domes- 
tics," 2| yards to the pound, at 3|i=7| cents per yard. .$2,840 90 

Charges : — 

Commission for purchasing, freight from Manchester to Liv- 
erpool, dock dues, &c., 2 per cent 56 82 

$2,897 72 
Add 25 per cent, for advance in price in English market since 

January, 1843 724 43—3,622 15 

SALES OF SHEETING IN THE UNITED STATES. 

36,656| yards (at the same price of American, and of same quality, 
weighing 2| yds. to the lb., Laurence C, as per table, for spring pri- 
ces of 1843), 6| cents $2,382 69 

Add 2 cents per yard on 36,656| yards for rise in price since January, 

1843, as per table 733 14 

$3,115 83 



ON THE COTTON-GROWING INTEREST. 497 

be doubtful whether this is best for the interest. If it should be 
thought best to push the growth of cotton in the United States, till 

Charges : — 

Expenses of importation, 7| per cent, on $3,622 15, cost on 

shipboard $271 65 

Labor, cartage, storage, advertising, fire insurance, &c., 1 pr.ct. 31 22- 
Interest for 9 months (sold on 8 months' credit, 1 month after 

receipt), 4| per cent, on $2,959 20 133 16 

Comraiss'n and guaranty on gross sales, $3,115 83, at 5 pr. ct. 155 79 — $591 82 



Net proceeds $2,524 01 

for the 100 bales shipped to Liverpool and invested in sheeting, and sold in New 
York at prices of 1844, being a rise of 31 per cent, from prices of 1843. 
"Now suppose the 100 bales of cotton to have been sold in this country at the 
prices of February 3, 1844, it veould have been sold at 9f cents. 

100 bales of cotton, 42,000 pounds, at 9f cents $4,095 00 

Saving — 1 month in voyage to Liverpool; 2 months while on hand 

there ; and 1 month for return voyage=4 mos. interest, 2 per cent 81 90 



$4,176 90 
Deduct amount of sales of sheeting 2,524 01 



Difference saved in selling cotton in the United States $1,652 89 

" The cotton yielding 66 per cent, more by selling in the United States, than by 
shipping to Liverpool and importing sheetings and selling them in the United 

States — AND THIS, TOO, WITHOUT DUTY IN THIS COUNTRY. 

"The price of fair cotton is taken from Wilmer & Smith's Price Current of Feb- 
ruary 3, 1844. The price of best English sheeting, and best American (Laurence 
C) of same quality is taken from Mr. M'Duffie's table accompanying his speech. 

" In this example, if a duty of 20 per cent, ad valorem had been computed on the 
goods imported, it would have amounted to $724 42, and the 100 bales of cotton 
would have net but $1,799 59; and it would have produced 132 per cent, more, if 
sold in this country at prices in New York at the same time (February 3, 1844), 
deducting one cent per pound for charges for freight from southern ports, com- 
missions, Sec. 

Statement of the Account of two million Bales of Cotton sold in Liverpool, and the 
Proceeds invested in best English Sheeting (that being the cheapest article accord- 
ing to substance), and the Sheeting sold in the United States for Account of 
Planters. 

2,000,000 bales, 420 pounds each 840,000,000 lbs. 

Draught, 1 pound per bale 2,000,000 lbs. 

Tare, 4 lbs. per cwt. on 7,500,000 cwt 30,000,000 lbs. — 32,000,000 lbs. 

808,000,000 lbs. 



At 5irf. = l H- cents per pound, is $92,920,000 00 

Deduct charges in United States and Liverpool, as per statement 

No 1, annexed 20,477,200 00 

$72,442,800 00 
Purchase of sheeting : — 
Invested in English sheeting at prices of 1843, as per 

Mr. M'Duffie's table, with an advance of 25 per 

cent, for rise since — 733,133,966 yards of sheet- 

32 



498 THE EFFECTS OF A PROTECTIVE SYSTEM 

its prices shall be reduced to the maximum that would command 
the market of the world, the way is open ; and it is possible that 

ing, called in England " stouts or domestics," weigh- 
ing 2| yards to the pound, at 3|(i.=7| cents per 

yard, is $56,817,882 36 

Commission for purchasing, freight from Manches- 
ter to Liverpool, dock duty, &c., 2 per cent 1,136,357 64 

$57,954,240 00 

Add 25 per cent for advance in price in English mar- 
ket since January, 1843 14,488,560 00-$72,442,800 00 

Sales of sheeting in the United States : — 

733,133,966 yards (at the same price of American, and of same qual- 
ity, weighing 2| yards to the pound, Laurence C, as quoted in Mr. 
M'Duffie's tables for spring prices of 1843), at 6| cents per yard $47,653,707 77 

Add 2 cents per yard on 733,133,966 yards, for rise since January, 

1843, as per Mr. M*Duffie's table 14,662,679 32 



Charges :— $62,316,387 09 

Expenses of importation, 7| per cent, on $72,442,800, 

cost on ship board, is $5,433,210 00 

Labor,cartage, storage, advertising, insurance against 

fire, 1 per cent 623,163 87 

interest 9 months (sold on 8 months' credit 1 month 

after receipt), 4^ per cent, on $59,200,567 64 2,664,025 54 

Commission and guaranty on gross sales, 5 per cent. 

on $62,316,387 09 3,115,819 45-11,836,218 86 



Net proceeds, without duty $50,480,168 23 

With a duty of 20 per cent, on foreign cost, $72,442,800, is 14,488,560 00 



$35,991,608 23 

Explanation of the result of this impolitic routine of business : — 

Paid to English manufacturers for goods more than the same arti- 
cle could be purchased for in this country $10,126,412 91 

Expenses paid on importing and selling the goods 1 1,836,218 86 



Loss to planters yrithout duty $21,962,631 77 

Duty paid in this country, 20 per cent 14,488,560 00 



Loss with 20 per cent, duty $36,451,191 77 

" To have sold the cotton in the United States for cash at 9f cents, the price of 
February 3, 1844, it would have netted $46,268,398 more, or 130 per cent., than 
if exchanged for coarse sheeting in England and sold in this country at prices of 
January, 1843, with two cents a yard addition for rise since. The consumption of 
the United States of cotton goods requires, say three sixths coarse sheeting, drilling, 
&c., two sixths prints, and one sixth bleached shirting, &c. If such goods, and in 
these proportions, had been imported (instead of all coarse sheetings), the two mill- 
ion bales of cotton would have netted $37,474,728, instead of $35,991,608, a differ- 
ence of $1,483,120, or about 4 per cent. more. 

"Since February 3, 1844, the time when the estimates were made of the price 
of cotton in both countries, it has receded 1| cents per pound. If we estimate at 
present prices for the crop, it would yield in the United States $69,360,000 As 
the return in cotton goods, of the most favorable descriptions (brown shee'ing, 
prints, and bleached shirting), for the crop sold in Europe, yields $37,474,728. the 



ON THE COTTON-GROWING INTEREST. 499 

this may be the natural result of competition. But, in any case, 

the protective policy is favorable to prices* The more the United 

difference between selling and investing in England, and selling here, would be but 
$31,885,272, or about 85 per cent, more, by selling in the United States. 

" Let us contrast the effect of this foreign plan, as presented in the foregoing 
table, with the result of the American system of trade and commerce upon the same 
crop of cotton : — 
" Of a crop of 2,000,000 bales, say one fourth is consumed in this country, and three 

fourths in foreign countries: — 
500,000 bales, 210,000,000 pounds, worth in the northern markets 

February 1, 1844, at lOf cents $22,375,000 

Expenses — freights and shipments, coastwise, secured by law to 

Americans, and labor, &-c., at 1 cent per pound 2,100,000 

In southern ports — for planters. 20,275,000 

1,500,000 bales sent to foreign countries, and sold at the same prices 
at which it ruled February 3, 1844, 5|rf. = 11| cents, 

on 606,000,000, is $69,690,000 

Paid American shipowners, merchants, &c., for freight 

and commission ' $10,114,800 

Paid foreign duties, dock dues, &c 5,243,100—15,357,900 

54,332,100 



Net amount to planters for crop 71,607,100 

Deduct amount of same crop received when disposed of upon foreign 

system 37,474,728 



Difference in favor of planter s of the American over the foreign system 37,132,372 

"Let us present the effect upon the whole country: — 
"The 1,500,000 bales sold in Europe, including freight, &c., paid to Americans (if 

invested) in such merchandise as is required in the United States, will sell for 

enough to pay cost and charges, as follows : — 

Sales of cotton abroad $69,690,000 

Less amount paid foreigners, duties, dock dues, &c 5,243,100 

$64,446,900 

Add charges abroad for purchasing, 2 per cent 1 ,288,936 

65,735,836 
Add freight and charges to United States, 7| per cent 4,930, 1 87 



70,666,623 
Of this amount, say two thirds are dutiable goods, at 30 per cent, on 
$47,111,032, is 14,133,324 



84,799,947 
Interest, and profit, and small charges, 10 per cent 8,479,994 



The value of the goods in the United States 93,279,941 

Of which there would be to pay planters for net sales abroad 54,332,100 

38,956,841 
Deduct for charges in England 1,288,936 

Leaving to distribute between the government, shipowners, laborers, 
merchants, &c 37,767,905 



^§0 THE EFFECTS OF A PROTECTIVE SYSTEM 

States go into the manufacture of cotton, so much more will it be 
necessary for the British manufacturers to push their work, and 
ply their commerce, to hold their own markets, and gain others. 
Their salvation and that of the British empire, depend on this. 
The competition between the British and American manufacturers, 
under a good system of Protection for the latter, can not be worth 
less, as shown by the " Southern Planter," than one to two cents 
a pound to cotton ; and the quantity in demand will be constantly 
increased and increasing, on account of this competition. It is 
amazing that the cotton-growers should not have discovered this 

The 500,000 bales, manufactured in this country, would produce three 

times the value of the raw cotton $67,125,000 

To pay planters in southern shipping ports 20,275,000 



Leaving to distribute among laborers, mechanics, manufacturers, mer- 
chants, shipowners, and farmers . . 46,850,000 

" The entire value of the cotton crop, according to the American system, to wit : 

500,000 bales manufactured $67,125,000 

1,500,000 bales shipped abroad, freights, duties, &c 93,279,941 



Of which the cotton planter would receive for sales in 

the United States $20,275,000 

in foreign countries 54,323,100 



$160,404,941 



The merchants, manufacturers, mechanics, shipowners, 
farmers, and laborers, for that part manufactured in 

this country $46,800,000 

For that part shipped abroad, $37,767,905 

Foreigners 1,288,936—38,956,841 



$74,598,100 



85,806,841 
160,404,941 



By American system — 

Planters receive $74,598,100 Other Americans $84,517,905 

By foreign system — 

Planters receive 37,474,428 Other Americans 1,463,163 



Difference in favor of American 

system, to planters 37,123,672 To other Americans. . 83,053,742 

By American system — Planters and other Americans receive, in total, $159,116,005 
By foreign system — Planters and other Americans receive, in total, 38,937,591 



Total difference in favor of American system to planters and others, $120,178,414 

" If business had been encouraged, so that the increase of majiufaclures had 
kept pace with the production of cotton, we would now manufacture nearly or quite 
the whole crop, and produce an annual amount of $268,500,000 of these manu- 
factures. 

" This business would not only have secured a certain market for our crop of 
raw cotton, but would have created a demand for agricultural productions for 
double the amount of all which we now export to all nations.'^ 



ON THE COTTON-GROWING INTEREST. 501 

before ; but the following facts will show that they are beginning to 
see it now. A convention of one hundred and four cotton-planters 
in Mississippi, in 1845, passed a series of resolutions in favor of the 
protective policy, of which the following are extracts : " That they 
are in favor of the tariff of 1842, because it affords, as they believe, 
adequate protection to all kinds of domestic labor, and renders it 
independent, not only in name, but in fact; because it will induce, 
at the north, large investments of capital, and the employment of a 
large number of laborers, in the manufacture of cotton goods ; that 
it will extend the consumption of manufactured articles, and there- 
by increase the demand for the raw material ; that it will give the 
growers of cotton two markets, instead of one, and one of these a 
home market ; because it protects indirectly the growers of small 
grain, and gives them a home market ; because it protects indi- 
rectly the hemp-growers, and keeps the large amount of capital 
now invested in that business from being employed in the culture 
of cotton ; because it protects indirectly the breeders of hogs, hor- 
ses, and mules, and gives them a home market ; because it protects 
the producer of sugar, gives him a home market, and prevents the 
vast amount of capital and labor invested in the culture of cane 
from being directed to the already redundant production of cotton ; 
because all experience proves that its ultimate tendency is to re- 
duce the price of manufactured goods, and thereby benefit consu- 
mers of all classes ; because no one great interest of the country 
can be adequately protected, without in some degree extending 
protection to all other interests, and that none derive more essential 
benefit from the general prosperity of other pursuits than the cotton- 
grower ; because the interests of the manufacturers of cotton goods 
at the north are identified with the interest of the grower of cotton 
at the south, and that, as strength is added to these two great inter- 
ests, the one at the north and the other at the south, so will strength 
be added to the bands which bind this glorious Union together." 

It is not to be supposed, with all the natural advantages for man- 
ufacturing which the south possesses, especially Georgia, that she 
will be long without being prepared to manufacture her own great 
staple, cotton, in the regions of its growth. She has already begun 
the work, and is advancing. Such a system will be an incalculable 
saving and gain to the south. But whether manufacturing is done 
there, or at the north, the south is benefited ; but she will be more 
benefited when it is done at home, for the same reason that it is 
better to do it in the United States than to have it done abroad 



503 PRINCIPLES, OBJECTS, 



CHAPTER XXXI. 

THE PRINCIPLES OF A TARIFF AS THEY RESPECT THE OB- 
JECTS OF DUTIES AND THE MODES OF COLLECTING THEM. 

An American Economist of the present Time exposed to the Charge of Political Partisan- 
ship. — He is obliged to examine public Mpa>ures a^ Facts — The Principles of the 
" Revenue Standard" examined — A Tariff not a Revenue Measure, except inciden- 
tally. — The Customhou'^e System inron.sisteiit with Free Trade — Diect Taxation and 
Free Trade go togetlier — No such Thin:: as Incidental Piotec ion. — Minimum Duties 
and their Effects. — Specific Duties — Ad Valorem Duties. — History and Effects of these 
Different Modes of Duties. — Proofs in Point. 

We are comjDelled, in many parts of our argument, to run the 
risk of being called a political partisan, though we have no interest 
in anything but truth. It is evident eiiough that public econ- 
omy can not be separated from politics, when its very purpose 
is to establish a creed for statesmen. There is not a question that 
falls within its range that is not a question of state. It is also more 
pertinent to our argument, and more forcible, to notice things done, 
than to suppose things done ; and the more recent they are, so 
much better are they known to all. The reader of the Free-Trade 
economists will always find Injyothcses of facts as the instrument 
and ground of reasoning, which are framed to suit their purposes; 
but rarely does he meet with facts in those authorities as the basis 
of a theory. On the contrary, we resort to Atcts as the only ground 
of reliable deduction. Hence we are often forced into the midst 
of political events and agitations. Some of the more recent parts of 
the political history of the United States furnish facts for the econ- 
omist, which it is impossible to overlook ; or which, being over- 
looked, would be a great defect in his work. The questions which 
we have in hand imperatively demand, among other things, that 
we should review the measures and examine the doctrines of the 
administration which commenced its career on the 4th of March, 
1845, so far as they relate to a protective system. In doing this, it 
becomes necessary to notice their official documents, and some of 
the acts passed at their recommendation, as we have several times 
done, but which we are obliged to do more at large in this chaptei 
and the next following. The tangible points which they present, 
and the facts with which they are connected, antecedent and sub- 



AND MODES OF A TARIFF. 503 

sequent, relating to a protective system, which, as opposed to Free 
Trade, is the leading and main topic of this work, present them- 
selves in the foreground of that wide field which is the subject of 
our investigation. 

And here it is pertinent to remark, that, as matters go on, in 
the administration of the government of the United States, the ut- 
terances of the secretary of the treasury, in his report on the 
finances, are of course to be regarded as the echoes of the mind 
and will of the president ; though, by the constitution and laws, 
the secretary is an agent of Congress, accountable to that body 
alone, should act in liarmony with his legitimate masters, and in 
obedience to their instructions. This incongruity was established 
in 1833, when the president took charge of the treasury. As the 
report of the secretary of the treasury, of December 3, 1845, was 
made the basis of the tariff of 1846, in accordance with the views 
of the president (it is an echo of the message), an examination of 
the principles of the report will determine those of the new law. 

We proceed to consider what is called the ^^ revenue standard^'* 
in the formation of a tariff. The secretary of the treasury of the 
United States, in his annual communication to Congress, Decem- 
ber 3, 1845, seems to have made a discovery, to wit, that imposts 
laid for any other purpose than revenue are unconstitutional. He 
says : " The whole power to collect taxes, whether direct or indi- 
rect, is conferred by the same clause of the constitution. The 
words are : ' The Congress shall have power to lay and collect 
taxes, duties, imposts, and excises.' " Assuming, first, that " taxes" 
are identical with " duties and imposts ;" next, that all duties are 
taxes ; thirdly, that protective duties are either partially or entirely 
prohibitory; fourthly, that power is identical with duty, that is, a 
" power to collect" means sliall collect ; and fifthly, that a tariff 
of duties on imports is a mode of taxation for revenue 'prescribed 
by the constitution; — with such a string of assumptions, the sec- 
retary arrives, with self-plumed honors on, to the logical achieve- 
ment that protective duties are unconstitutional. First, because 
protection is not authorized by that instrument. Next, because, if 
it were, when the duty amounts to prohibition, as it sometimes 
does, the duty can not be collected ; or to a partial prohibition, as 
at least it must, a part of it can not be collected. Hence, none 
but duties imposed expressly and only for revenue can oe consti- 
tutional. 

Unfortunately for the secretary, the first of the above-named as- 



§^ PRINCIPLES, OBJECTS, 

sumptions requires proof, and is open to disproof; the second is 
disproved ; the third is of no consequence ; the fourth is an ab- 
surdity ; and the fifth also requires proof. 

To assume that " duties and imposts" are identical with *' taxes," 
or that the same thing is meant by the former as by the latter, 
amounts to an accusation of superfluity of language in the consti- 
tution, made for and held to be a concise and comprehensive doc- 
ument. The constitution manifestly names *' duties and imposts" 
as a different sort of thing from " taxes" — as occupying their own 
peculiar position, and as discharging their own appropriate func- 
tions, as in fact they do, in public economy. They may be taxes ; 
they may not be ; they certainly are not always. It has been 
proved that protective duties are rarely taxes — never as a whole ; 
and that, as a system, they operate quite the other way. If it be 
asked, " Why, then, are the two words, * duties and imposts,' used 
here?" — the answer is, because they do not always mean the 
same thing. Though duties are imposts, prohibitory imposts are 
not duties, in the strict meaning of terms, because, in such a case, 
there being no entries, there can be no duties to discharge. 

The second assumption is answered by the evidence in a former 
chapter, that protective duties are not taxes. The third is granted, 
but is of no consequence, while the others fail. It need not be 
said, that the fourth is a manifest absurdity. As to the fifth, it 
may be remarked that a tariff is ?/o^ prescribed in the constitution as 
a mode of raising revenue ; next, that the design of a tariff, in all 
nations, and in all cases, is to regulate foreign commerce so as to 
protect the interests of the state and of the people in foreign trade ; 
thirdly, and consequently, that the revenue functions of a tariff are 
incidental, not primary, or necessarily inherent. If, in accomplish- 
ing the original and main design of a tariff, revenue can be raised, 
it is well ; but it is incidenlal. If a sufficient revenue can be raised, 
and direct taxation avoided, so much the better. Still, this inci- 
dental result does not change the original design and character of 
the measure. No one will pretend that drawbacks and bounties 
are any part of a revenue measure, though they may be a very im- 
portant part of a tariff. The whole of the secretary's argument on 
this point, therefore, is a total failure. 

This erroneous idea, that a tariff is a revenue measure, except 
incidentally, is of some importance to be corrected, not simply in 
answer to the secretary's reasoning, who seems never to have 
thought of the original and true design of a tariff; but for the sake 



AND MODES OF A TARIFF. 505 

of showing what that design is. This is the first time, in the his- 
tory of tariffs, that an attempt has been made to prove a tariff a 
revenue measure, in the theory of law and the constitution. In do- 
ing that, the honest way would be to drop the name, which has ever 
been held to signify a different thing, and which was devised for a 
different purpose. Honesty, indeed, would require more than this. 
For, if all the original and long-continued objects of a tariff are to 
be abandoned ; and if it be indeed true, as Free Trade asserts, that 
all duties are taxes up to their specific amount, it is a very great 
injustice to the people to add to these taxes the immense tax of 
the customhouse system, by sustaining all its machinery and offices. 
If the doctrines of Free Trade be true, every customhouse in the 
land should be closed as soon as possible, and the system should 
be forthwith abandoned. It is a very expensive system, if there 
is no power in it — as the protective policy avers there is — to sus- 
tain itself. According to the theory of Free Trade, the people 
ought to be relieved from this burden, and a system of direct taxa- 
tion, to support the government, and supply its wants, ought to be 
substituted. If the people can have an intelligent belief in Free 
Trade, it is impossible they should not also see that it will be much 
lighter, and much more just to all parties, for every one to be 
fairly assessed on his property for all the requirements of the pub- 
lic treasury. The chief burden of supporting the government 
would then fall where it ought — on the rich. There can be no 
apology, according to the doctrines of Free Trade, for continuing 
a tariff, as a mere revenue measure ; for no system of taxation 
could be more unjust in itself, besides the injustice of imposing on 
the people the superfluous, heavy, and oppressive expenses of the 
customhouse system. 

But it has been proved in this work, over and again, in a variety 
of forms, that protective duties are not taxes ; and that, if properly 
adjusted, they will not only support the government, in a time of 
peace, and defray all the expenses of the customhouse system, 
which is a part of government ; but that it will rescue us from a 
grievous system of foreign taxation ; be of incalculable benefit to all 
sections and to all parties, rich and poor, of the country ; sustain 
the currency and make it abundant; give employment and good 
wages to all kinds of labor ; and contribute to the wealth of the 
nation, in a manner and degree that can not be easily estimated : 
while Free Trade, as all our experience, also abundantly cited in 
this work, proves, would produce directly the contrary effects in 



606 PRINCIPLES, OBJECTS, 

all these particulars. The original and legitimate object of a tariff, 
especially in the United States, is " to regulate commerce with 
foreign nations" — an express authority of the constitution — so as 
best to secure the interests of the country and of the people, as 
above specified — especially the interests of labor, which is the soul 
and body of all wealth ; whereas, the object of obtaining revenue 
by a tariff was originally, has ever been till now, secondary and 
purely incidental. If the protective principle is to be abandoned, 
it is obvious that the only honest course is to abandon with it, alto- 
gether, the customhouse system. Without protection, it is a use- 
less expense, and a heavy additional tax. 

Nothing could exceed the confusion and derangement which the 
principle of this " revenue-standard" theory, reduced to practice, 
would occasion to the interests and business of the country, because 
that rate of duty on a specific article which would raise the most 
revenue, when imposed, would, almost invariably, by its operation, 
require to be changed every year — often every six months — to 
accomplish the same object. It would, indeed, if carried thoroughly 
into execution, in a very short time, most seriously derange, if not 
break up a vast many of the most important interests of the country, 
besides the injurious effects it must have on all others, by an indis- 
soluble connexion and sympathy. 

A common error, both of the secretary and of the president, in 
carrying out their " revenue-standard" theory, seems to have been 
in assuming, that every duty on articles of desired home production, 
is protection. This is an important practical error, and has given 
rise to the false notion of " incidental protection," when, in fact, 
there can be no such thing as incidental^ that is not jwsitive, protec- 
tion. On this point, the president says, in his message of Dec. 2, 
184-5: "If Congress levy a duty for revenue, of one per cent., on 
a given article, it will produce a given amount of money to the 
treasury, and will incidentally and necessarily afford protection or 
advantage to the amount of one per cent., to the home manufacturer 
of a similar or like article, over the importer." The entire fallacy 
of this doctrine of " incidental protection" will be seen at once, 
when it is considered that the ability of the home-producer to begin 
and to sustain himself against foreign competition, depends alto- 
gether on his having adequate and positive protection, which is 
rarely, if ever, as low as one per cent. ; may be five, or twenty, or 
fifty, or one hundred, or two hundred per cent. But he can never 
begin, and can never sustain himself, till he has a positive protec- 



AND MODES OF A TARIFF. 507 

tion, equal to the ability of the foreign producer to undersell him In 
his own market. This idea, therefore, of " inddevtal protection," 
is a perfect fallacy — a positive deception. There never was — 
there never can be any such thing, measured out in the way the 
president proposes, as if it could be effective for the degree speci- 
fied, when it fails to be adequate. And yet — strange to say — this 
phantom is the only basis on which the president and secretary 
build their scheme of protection for the people. It is the only 
protection that is proffered to their hopes in tlie tariff of 1846. 
The Pennsylvanians are favored with an ^^i?icidental protection," 
not of ojie, but of ihirfij per cent., on iron and coal. Is that pro- 
tection ? So of a vast many interests of the country — an "inci- 
dental protection" to their ruin. Just enough to miss it. 

The rule of minimum duties is, that a given kind of goods, or 
merchandise, valued, at or below a given price, shall be assessed 
with a specific duty at that price ; as for example : " Manufactures 
of cotton, not dyed, colored, printed, or stained, not exceeding in 
value 20 cents per square yard, shall be valued at 20 cents per 
square yard," for the assessment of an ad-valorem duty of 30 per 
cent., as under the tariff of 1842. 

There has been a most inexcusable ignorance or dishonesty, in 
the reasonings of the advocates of Free Trade, on the effect of 
minimum duties. With some, it seems to have been ignorance ; 
and charity would lead us to suppose it has been sO with most. 
The secretary of the treasury, in his annual report of December, 
1845, says : " If any discrimination should be made, it should be 
the reverse of the minimum principle, by establishing a maximum 
standard, above which value the duties on the finer article should 
be higher, and below which they should be lower on the cheaper 
article." He argues that by the minimum rule, the rich are favored 
at the expense of the poor ; or that there is a partiality in favor of 
the former, and against the latter ; and at first sight, as an ad-cap- 
tandum argument, it would seem plausible. But it is demolished 
by proof of the fact that these protected articles of manufacture are 
cheapened by protection. The secretary, through either ignorance 
or design, fails to consider how this minimum rule operates on 
prices of the articles, in consideration of the different slate of the 
manufacturing arts in this country and in Europe, when the rule 
was established, and that as soon as the minimum duty becomes 
prohibitory, the consumer here is rescued from a system of foreign 
taxation, and has all the benefit of a vigorous home competition, 



5©8 PRINCIPLES, OBJECTS, 

that gives him these articles, which are covered by the minimum 
duties, cheaper than he could have got them from abroad, if the 
home producer had not been encouraged to provide them by pro- 
tection. It is on the lower degrees of the scale of prices, that 
American arts, under adequate protection, first overtake and out- 
strip the European arts; and the system of minimum duties, grad- 
ually ascending the scale, enables American arts to rise wdth them, 
and as fast as they rise, in perfection and vigor, they cheapen 
prices ; so that tfie poorer classes have the first and largest benefit 
of this influence ; and they have it chiefly because and when the 
minimum duties become prohibitory. 

There is a most inexcusable statement in the same report of the 
secretary on this subject, which is the more important, as it consti- 
tutes one of the chief elements of his reasoning, and that of others 
of his school. In the same manner as British factors were intro- 
duced into a committee-room of Congress, in the winter of 1845-'6, 
and invited to display their goods, in order to show how much bet- 
ter it would be for the American people to buy than to make thera, 
so Mr. M'Kay, chairman of the committee of ways and means, 
in framing his report (house document, No. 306, 1st session, 28th 
Congress), thought proper to fortify one of his positions by citing 
a price current published in Manchester, England, by Stewart, 
Thompson, and Lay, January 31, 1843. The price of "stouts 
or domestics," an imitation of a species of American cotton goods, 
was there given, with the additional statement, that they had to 
pay 100 per cent, duty in entering the United States, under the 
minimum rule. The secretary of the treasury, eagerly catching 
at this information found in Mr. M'Kay's report of the preceding 
Congress, as it suited his purpose, and taking for granted that these 
goods were actually imported under that duty, made the following 
statement : " This difference is founded on actual imjiorlation, and 
shows an average discrimination against the poor, on cotton imports, 
of 82 per cent, beyond what the tax would be, if assessed upon 
the actual value." The secretary hastily — it is presumed not 
reluctantly — adopted the conclusion, that trade was then going 
on in that way ; whereas, this very species of goods was actually 
sellino: lower in Boston and New York, at the time this Manchester 
price current was published, than the prices there quoted for the 
English market. It was because the minimum duty was prohibi- 
tory, and gave the widest scope for home competition. 

It is very well known to those who understand the subjecS, and 



AND MODES OF A TARIFF. 509 

who are acquainted with the facts, that the effect of minimum 
duties, is to lower the prices of low-priced goods, chiefly used by 
the poor, and to pull down prices at higher points of the scale, in 
proportion as American manufacturing skill improves. And yet, 
the secretary has made a bugbear of minim ums, to frighten the 
poor. Did he himself understand the subject? If so, he is open 
to a more grave impeachment than that of ignorance. 

It is on this false principle, and false statement of facts — of 
which it is charitably supposed the secretary was ignorant — that he 
arrives at the following false conclusions, first, generally, that 
** minimums and specific duties render the tax [which is no tax at 
all] upon the real value much higher upon the cheaper than upon 
the Ji?ier article;" secondly, and specijicallijy that, "by estimates 
founded on \\\q same document [Mr. M'Kay's report], the discrimi- 
nations against the cheaper article [under the tariff of 1842] must 
amount to a tax of $5,108,422, exacted by minimums and specific 
duties annually from the poorer classes." And yet, as a natter 
of fact y the true proposition on the point, is, in both particulars, 
directly the reverse of this. Is it possible the secretary should have 
been ignorant in this case ?* 

* Minimum duties were first introduced by southern statesmen, Messrs. Cal- 
houn and Lowndes, in the tariff of 1816. It will be found, by an examination of 
senate document, No. 109, second session, 28th Congress (a document from the 
secretary of the treasury), that the application of the minimum principle to wool- 
lens, puts the tax (if indeed it were one, but it is not) on the costly goods worn by 
the rich, and is all in favor of the cheaper goods worn by the poor. The annual 
revenue from this source, under the tariff of 1842 (see same document), was over 
two millions of dollars. By the same authority, it appears that the application of 
the minimum principle to cottons yielded annually to the revenue, under the tariff 
of 1842, upward of four millions of dollars, the chief burden of which (if burden 
it was, but it was not) falls on the finer goods worn by the rich. Even these 
are cheapened, such of them as are rivalled at home by the action of domestic 
against foreign competition; and those not rivalled at home are the finest and 
most costly, not used except by those who indulge in luxuries. That the low- 
priced cotton goods are greatly cheapened, is not only proved by the prices cur- 
rent, but is demonstrated beyond all contradiction by the facts that they ^o forth 
into the widest field of competition, in all parts of the world, with British goods 
of the same description, and that the British government was forced to enact dif- 
ferential duties for their dependencies, in favor of British products, to keep out 
American. 

The revenue raised in one year, under the tariff of 1842, by the application of 
the minimum principle, on cotton goods, as stated in the abovenamed document, 
was as follows : $1,121,000 from goods costing above the minimum, at a duty of 
30 per cent. ; $2,574,000 from printed and colored goods, at 9 cents square yard, 
or 43 per cent, duty; $544,000 from plain goods, at 6 cents square yard, or 45f 
per cent, duty; and $34,000 from velvets, &c., at 10^ cents square yard, or 35 per 



510 PRINCIPLES, OBJECTS, 

A s'pecijic duty is assessed by measure, as so much per yard, 
per gallon, per cwt., per caldron, &c., the instrument of measure 
being such as the nature of the article requires. An ad-valorem 
duty is assumed to be an assessment according to the value of the 
article, and the rule of valuation is the foreign invoice, with legal 
provisions to guard against fraud. Of what effect these provisions 
are, will be seen by-and-by. Specific duties are not imposed with- 
out regard to value ; but it is obvious, that this rule applied to any 
article which has a wide range of values for a given measure, as 
cloths, wines, tea, coffee, &c., must operate with inequality, when 
this term is not used in the sense of injustice, which could not 
easily be proved in such a case, as it is rather a question of discre- 
tion and expediency than of right and wrong. One of the objects 
of specific duties is to abate this inequality, and come nearer to the 
real values. The ad-valorem mode is also attended with its dif- 
ficulties, especially when, as in the case of the American law, the 
rule of valuation is the foreign invoice, the temptations to fraud 
being so strong, and its means so easily employed, with great 
chances, usually with a certainty, of impunity. The experience 
of all governments, down to this time, has decided in favor of the 
specific mode, as being on the whole most convenient, most secure 
of the ends aimed at, and especially as being a preventive of im- 
morality and crime. But notwithstanding these reasons of expe- 
rience, the new American tariff of 1846, on the recommendation 
of the president, was constructed on the ad-valorem principle, re- 
cent, duty ; in all, $4,273,000, with an average duty of 38 per cent. If this min- 
imum duty were a tax, it must be seen how it falls chiefly on those who bought Ihe 
hish-priced goods; and that the small amount collected on the low-priced goods 
was not a tax, is evident, as well from the positive reduction of prices, as from the 
fact that they are sold against the same description of British goods in all parts of 
the world. But it has been shown elsewhere, that none of these duties, imposed 
for protection, are taxes. 

But one of the most stupendous effects of the application of the minimum prin- 
ciple of duty, is the opening of a vast market for American cotton fabrics — of 
course for the raw material — in eastern Asia, whence the same kind of goods for- 
merly came to Europe and America. The cheap labor of China and the far east, 
has been undersold by the high-priced labor of America, in tlie application of su- 
perior skill and economy of production, and a channel for an annual export of 
some millions, from the United Slates, has been opened by this course, destined to 
increase, almost without limit, under the same system. 

South Carolina, in establishing the cotton minimums of 1816, laid the foundation 
for this turning back upon Asia the most essential production of the Southern 
slates. It is among the strangest things of things strange, that this immense mis- 
take, this fatal blunder, above considered in the text, should have been made by 
the very parties so vitally injured by it. 



AND MODES OF A TARIFF. 611 

jecting the specific. It is proposed to examine these two modes. 
See note.* 

* If one could not be surprised, in the midst of so many new things, one might 
yet be so, in view of a reason given by the secretary of the treasury for the adop- 
tion of ad-valorem as a substitute for specific duties. He says : " Experience 
proves, that, as a general rule, a duty of 20 per cent, ad valorem will yield the 
largest revenue." Now, it happens, that all experience leads to the opposite con- 
clusion, and that statesmen, heretofore, in all countries, wishing to raise the largest 
revenue, by imposts, have preferred the form of specifics. Great Britain has had, 
and still has, occasion for the highest possible revenue on certain articles, and she 
invariably, when it is practicable, having that object in view, adopts the specific 
form, as on teas, the duties on which are at least 200 per cent., and produced, in 
1842, upward of $19,000,000. Her duty on sugar, for the same year, specific, 
produced upward of $24,500,000. The subsequent reduction of duty on sugar, 
was fur relief, not for revenue. Her duties on wines and tobacco are specific, va- 
rying from 300 to 900 per cent., and produce a revenue of about $40,000,000. It 
is unnecessary to go farther for the experience of England. Our revenue for the 
year 1831, under the high tariflf of 1828, the duties having been made specific, as 
far as possible, was $30,312,851 net, at rates of duty averaging 41 per cent, on 
dutiable articles. Our lowest tariff was in the last year of the compromise, 1842, 
with an average duty of less than 24 per cent. — commonly supposed to be 20 — 
on dutiable imports, and the net revenue for the year was $12,780,173. Is it such 
experience which the secretary appeals to ? Or where is it ? Mr. Polk said, in a 
speech at Madison, Tennessee, in 18-13, while canvassing for the office of gov- 
ernor : " It [the tariflf of 1842] will not produce annually half the amount of reve- 
nue which would have been produced by the lower rates of the compromise act ;" 
that is, by the tariff that was in operation when that of 1842 went into effect. 
This less than half, as will be seen, would have been less than $6,390,036 annual 
revenue for the tariff of 1842. But it actually produced an average of over 
$26,000,000 net. Was this the experience on which the secretary came to his con- 
clusion ? Twenty per cent, was the commonly alleged maximum, at the time, which 
produced a revenue of twelve millions and a half. 

The experience of our own, and of other governments, has, from the beginning, 
prompted the greatest possible pains to apply specific duties wherever practicable 
in the nature of the article; and in accordance with this experience, the list of 
specific duties had been increased, and that of ad-valorems diminished, in all these 
quarters, at every new modification of the tarifi", almost from time immemorial. 
England has always been aiming at this; many of the continental tarifis, the fa- 
mous Zoll-Verein in particular, are wholly specific. Mr. Gallatin, when at the 
head of the treasury, earnestly recommended more specific duties; so Mr. Dallas 
(Alexander J.) ; so Mr. Crawford ; and under each of these secretaries, as well as 
under others, mifch had been done to accomplish the end — chiefly, indeed, to pre- 
vent frauds on the revenue, at the same time that specific duties have always been 
regarded as the best mode of increasing the revenue, if required. 

But, though the amount of revenue can not be a trifling consideration, at a time 
when the public expenditures are running up to between fifty and a hundred mill- 
ions a year, yet the universal experience of frequent and great frauds, under a 
system of ad-valorem duties — frauds on the revenue, and frauds on American cit- 
izens and interests — presents considerations, which ought to bring every good man 
to a pause, before he should consent to open such a door to immorality and crime 
— to legalize fraud, and oflTer the most seductive advantages to perjury. What 
does a European factor of merchandise care for a customhouse oath, who has been 
bred in a school which teaches, that the evasions of imposts, by whatever means, 



512 PRINCIPLES, OBJECTS, 

As the modes of assessing duties had never been made a party 

question in the United States, one can hardly account for this 

is equally a virtue and a duty, and who will glory in it, when beyond the reach of 
punishment? Such, notoriously, is the state of morals in Europe, on this subject. 
The writer of these pages has seen and heard it there, as openly proclaimed and 
boasted of, as the proudest achievements. Nor is this the worst of it. Custom- 
house officers can be bribed, as abundant experience demonstrates. The tempta- 
tion to share in the spoils — and such spoils — is equally great to them, as to foreign 
factors, who, for the consideration they expect to realize, have been judicially 
proved to have sworn in their false invoices, with as much indifference as if they 
were making a fair trade. It puts the government, the people, and the interests 
of the country, on a stupendous scale, in the power of unprincipled villains of the 
blackest character. 

A report of the secretary of the treasury, 1843 (Senate Doc. No. 83, 3d session, 
27th Congress), is replete with melancholy instruction on this subject, showing, by 
the actionof the United States court, in the investigation of such cases, that frauds 
and perjuries, for a term of years, under ad-valorem duties, were habitually and 
systematically committed by foreign factors, with connivance of customhouse offi- 
cers, involving great amounts of value; and as but one crime in many is usually 
detected, the inference is fair, that, aggravated and great as these frauds were, as 
proved in court, they comprehended but a small fraction of those which were suc- 
cessfully carried on, simultaneously with these, and escaped punishment. In the 
case of one British importer, " John Taylor, jr.," aided by a deputy collector of 
New York, whose name is given as " Campbell," the frauds committed, in the 
course of twenty-one months, amounted to $200,000. This was but one of many- 
cases brought before the court, and each of the many was doubtless but one of 
many more that escaped exposure. Such is the system of duties adopted by the 
tariff of 1846, and such, inevitably, must be the consequences, in this countrj^, or 
any other, while man remains the same. It was to avoid these crimes, as far as 
possible, that great pains have been taken, for generations, by all governments, to 
substitute specific for ad-valorem duties, without regard to the amount of revenue 
— though it appears, that specific duties are more favorable to that. 

The law supposes that ad-valorem duties are assessed on the true value, and that 
is the intention. But when honest witnesses in court differ so widely, and scarcely 
any two ever agree, how shall an interested importer be controlled, or ordinarily 
convicted of his frauds ? When the importer can afford to purchase the conni- 
vance and aid of a deputy-collector, with a consideration, five, or ten, or twenty 
times as much as the officer's salary, the door to crime is wide open, and the temp- 
tations, with such chances of impunity, are irresistible. The greatest evil is not 
the robbery of the national treasury. That is one of the smallest, though the 
amount, in the aggregate, is very great. There is crime, corrupting the adminis- 
trators of the law, and poisoning the fountains of commercial integrity. Neither 
American merchants, nor American manufacturers, can stand before such a torrent 
of iniquity. The former are supplanted, and the latter are ruined. The very for- 
eigner, who, in his own market, has sold a New York merchant goods at one price, 
comes here, under the screen of his false invoices, and undersells him in the very 
same articles. How can the American Merchant stand, or the American manu- 
facturer live ? 

The following is an extract from a memorial to the senate of the United States, 
signed by 48 firms, or houses, comprehending all the importing drygood merchants, 
of Boston : — 

" To the honorable Senate of the United States : 

«' The undersigned, your memorialists, would respectfully represent, that they are 



AND MODES OF A TARIFF. 513 

Stupendous mistake of the administration of March 4, 1845. Let 
the note below, and other facts and reasonings of this chapter, be 

importers of foreign goods into the city of Boston, and as such they have examined 
with alarm and consternation, the bill recently i)asscd by the house of representa- 
tives [the act of 18-16], to change, in a great measure, our system of collecting 
duties on imports. Should the bill referred to become a law of the land, we are 
fully convinced that we shall be compelled to abandon our business into the hands 
of unscrupulous foreigners, who have little or no regard to our customhouse oaths. 
From long experience, we are fully satisfied, that we can not compete with this 
class, wnen duties are based merely on the ad-valorem principle." 

The Hon. Wm. H. Crawford, secretary of the treasury, said, in 1818: "The 
certainty with which specific duties are collected give them a decided advantage 
over duties laid upon the value of the article. It is probable that the most im- 
portant change which can be made in the system will be the substitution of spe- 
ciric for ad-valorem duties upon all articles susceptible of that change." 

The Hon. James Buchanan, of Pennsylvania, said, in the senate, in 1842: 
" Our ad-valorem system has produced great frauds upon the revenue, while 
it has driven the regular American merchant from the business of importing, and 
placed it almost exclusively in the hands of the asents of British manufacturers. 
The American importer produces his invoice to the collector, containing the actual 
price at which the imports were collected abroad, and he pays the fair and regular 
duty upon this invoice. Not so the British agent. The foreign manufacturer, in 
his invoice, reduces the price of the articles which he intends to import into our 
country to the lowest possible standard which he thinks will enable them to pass 
through the customhouse without being seized for fraud. And the business has 
been hitherto managed with so much ingenuity as generally to escape detection. 
The consequence is, that the British agent passes the goods of his employer 
through the customhouse, on the payment of a much lower duty than the fair Ameri- 
can merchant is compelled to pay. In this manner he is undersold in the market 
by the foreigner, and thus is driven from the competition, while the public revenue 
is fraudulently reduced." 

The Hon. Mr. Evans, in a speech in the senate, 1846, adduced "hundreds of 
instances" of fraud on the revenue, for under-valuation by foreign invoices. 

The following is an extract from a letter to theHon. Daniel Webster, 1846 :■" A 
merchant orders goods to be shipped from France and entered at New Orleans, for 
the western trade, with the understanding that he is to have them at the foreign 
cost, with the duties and charges added. 

A shipment was made with and forwarded to the purchaser amount- 
ing to 6,829.93 francs. 

At the same time the invoice forwarded with the goods to New Or- 
leans was 5,258.00 francs. 

Difference 1,571.93 franca. 

Or, $316.94 out of $1,300.94. 

"The goods were valued, therefore, in the entry, at $316.94 less than they were 
to the purchaser; and the purchaser was actually charged for the duty on this 
$316.94 as paid to the government, amounting to $95.10. Both the government 
and the purchaser were, therefore, cheated out of that sum. 

"This transaction occurred in the spring of 1846, and I send you a copy of the 
correspondence in which these facts are stated, and not denied; but the French 
house attempts a round-about justification for putting the foreign cost to the pur- 
chasers at a greater amount than the entry invoice. J. D.** 
33 



^14 PRINCIPLES, OBJECTS, 

well considered. They involve too grave, too momentous a ques- 
tion, to be lightly passed over. The principles of a tariff, as they 

Again, another letter to Mr. Webster : — 

" Boston, July 17, 1846. 

"Dear Sik : I am informed that a respectable house in this city received an in- 
voice of European goods from a foreign house, the amount of which was about 
$2,000, and that, after entering the goods at the customhouse by the invoices, they 
received another invoice valuing the same goods at about $8,000, with a letter, 
stating that the first invoice was to levy duties by, and the second to sell by. 

" The consignee here, who is also an importer, not being willing to be a party 
to the fraud, deposited both invoices at the customhouse, where they were yesterday. 

" 1 have no doubt of the authority from which I received this information, but I 
do not wish to be quoted for it. 

"I have thought that you might be pleased to know this fact, as the fraud is so 
great, and the perpetrator beyond the reach of any penal statutes of this country. 

" Your most obedient servant, 
"Hon. D. Webster, Washington. . 

*^ P. S. I hear that Mr. Lamson is the consignee." 

" Sir," said Mr. Webster, in the speech in the senate, in which he produced the 
above letters, July 25, 1846 : "Sir, one case more. A highly respectable firm in 
Boston (Messrs. George H. Gray and Co.) have been dealers many years in hard- 
ware, and in the habit of making importations of certain articles from the north. 
In these articles they found themselves constantly undersold by the dealers in 
New York. They could not understand the reason of this for a long time; but 
last spring the secret came to light. They had ordered a small amount of hard- 
ware to be sent to them, and in due lime the goods came, and iioo invoices came 
with them. In owe invoice, the cost was stated at 958 thalers ; in Wie other, at 
1^402. And the letter accompanying these invoices says : * You find herewith 
duplicate invoices of the greatest part of your order, &.c. The original 1 send by 
Havre packet. Yow also find herewith an invoice made up in the manner like [that 
which] the most importers of your country require; perhaps to save some duty.^ 
. " Now, sir, these original invoices, the false and the true, and the original letter 
which I have read, are now in my hand ; and any gentleman, who may feel 
disposed, may look at them. Of course, Messrs. Gray & Co. carried both invoices 
to the customhouse, because they were honorable merchants ; and the duties 
were assessed on the higher invoice. And by this time these gentlemen were no 
longer at a loss to account for the low price, at which this description of merchan- 
dise had been selling in the city of New York. 

"But now, sir, take not a single case, but the results of long experience. I am 
about to read a letter, not addressed to me, but placed in my hands, from a gentle- 
man well known, I presume, to both the senators of New York, and to other mem- 
bers. This letter, I think, will startle the honorable chairman. [The Hon. Dixon H. 
Lewis, who had said, he " did not believe that a case of fraudulent under-valuation 
had ever been made out."] It must open to his mind quite a new view of things. 

"'Troy, July 14, 1846. 

"'Le Grand Cannon, Esq. — Sir: Agreeably to your wish, I avail myself of 
this opportunity to give you the benefit 6f my experience in mercantile and manu- 
facturing business, hoping it may tend to an improvement of the bill, now pending 
in the senate, for the collection of duties. I hope members of Congress will have 
the same views of the probable results which I anticipate; which are, that the sys- 
tem of ad-valorem duties does give the foreign importer and manufacturer a very 
undue advantage over the American importer. This will be apparent from my 



AND MODES OF A TARIFF. 515 

respect the objects of duties and the modes of collecting them, in- 
volve the most important subjects of American legislation, and it 
would be well for the country if the American statesman who does 
not understand them, should resign his pretensions, and go home 
to school. 

own experience, which I give you annexed. My brother and myself were brought 
up in the town of Manchester, and well acquainted with the manufacturers and 
manufacturing. At the age of twenty years it appeared very evident to me that 
we could finish goods and import goods into New York about ten per cent, lower 
than the American merchant; and with this conviction I agreed to come out to 
New York and dispose of the goods, and leave my brother to finish and forward 
the goods. 

"'The result was equal to our expectations. We imported our goods ten per 
cent, cheaper than our competitors, and by the ad-valorem duties we paid nearly 
five per cent less duties ; so that, in twenty-two years, we made nearly a million 
of dollars, while nearly all the American merchants failed. Now, I reason, what 
has been will be ; and, should the present tariff bill pass, it will give the foreign 
manufacturer a decided advantage, and tend to reduce the rate of duties lower than 
is anticipated. And I can not avoid expressing my decided opinion in favor of 
specific duties, as then the foreign manufacturer would pay the same duties as the 
American importer. Benj. Marshall.' 

" Can any man gainsay the truth of all this ? Is there a merchant, foreign or 
American, in the United States, who will express any contrariety of opinion ? Is 
there a man, high or low, who denies it ? I know of none ; I have heard of none. 
Sir, it has been the experience of this government, always, that the ad-valorem sys~ 
tem is open to innumerable frauds. What is the case with England ? In her new 
notions, favorable to Free Trade, has she rushed, madly, into a scheme of ad-valo- 
rem duties ? Sir, a system of ad-valorem duties is not Free Trade, but fraudulent 
trade. Has England countenanced this ? Not at all ; not at all. Sir, on the con- 
trary, on every occasion of a revision of the tariff of England, a constant effort has 
been made, and progress attained in every case, to augment the number of specific du 
ties, and reduce the number of ad-valorem duties. A gentleman in the other house 
[Mr. Seaman] has taken pains — which I have taken also, though, I believe, not 
quite so thoroughly as he has — to go through the iten>s of the British tariff, and' 
see whnt proportion of duties in that tariff are ad valorem, and what are specific. 
Now, sir, the result of that examination shows, that at this day, in this British 
tariff, out of 714 articles, 608 are subject to specific duties. Everything that from 
its nature could be made specific, is made specific; nothing is placed in the list of 
ad-valorem duties but such as seem to be incapable of assessment in any other 
form. Well, sir, how do we stand, then ? We have the experience of our own 
government; we have the judgment of those most distinguished in the administra- 
tion of our affairs; we have the production of proof, on this most important point, 
in hundreds and hundreds of instances, of the danger of the ad-valorem mode of 
assessing duties. What is produced in its favor ? Every importer of the United 
States, without exception, is against it." 

*' This letter [Mr. Marsha:rs], I think, will startk the honorable gentleman." 
It is, undeniably, a startling document. It is only wonderful, that a person, who 
had been a particeps criminis, in this business, could have made the disclosure. 
He, doubtless, as all foreign factors do, when the laws of the United States open 
the door, considered the game a fair one; and the country is at least under one 
obligation to him, viz., for the excellent advice of this letter. 



516 THE TARIFF OF 1846. 



CHAPTER XXXII. 

THE TARIFF OF 1846. 

The Tariff of 1846 a Sarrender and Abandonment of the Principles of Protection. — Popular 
Instincts on this Subject. — It takes Years for the Proof of a new Tariff Policy. — 
Probable Result of the Tariff of 1846.— A Table showing the Effects of the Tariff of 
1846 on American Labor and Arts. — Remarks upon this Table. — The Effect of Auction- 
Sales of Imports on American Labor and Trade. — Importance of harmonious Legisla- 
tion between Federal and State Authorities for Auction of Imports. — The Discrimina- 
tions of the Tariff of 1846 against American Industry and Labor. — Tables in Proof- — 
Object of the Anti-Corn-Law League of England. — False Reasonings of Free Trade 
on the Effects of the Famine in Ireland and of the short Crops of Europe. 

As the principles of the tariff of 1846 are opposed to those of 
this work, and being now, in 1848, in actual operation as the law 
of the land, it is regarded not only as suitable, but necessary, for 
the complete elucidation of our principles, to take some further 
notice of it than is done in the preceding chapter, and elsewhere 
by incidental allusions, or in the discussion of abstract principles. 
As our aim from the beginning, and throughout, is to show what 
plan of public economy is best adapted to the United States, an 
actual system in operation, which we regard as ill adapted and in- 
jurious, could not with propriety be left unnoticed. 

The tariff of 1846 is a surrender and an abandonment of the 
principle of protection. This is not only understood, but the ob- 
ject is avowed in the messages of the president and in the reports 
of the secretary of the treasury. In these documents the question 
is argued, and there is no concealment of the design ; although, to 
obtain the necessary revenue, which is the principle of the meas- 
ure, some degree of protection, in some quarters, remains, not as 
an object, but as a result which could not be altogether prevented. 
This is an event of no inconsiderable importance in the political 
history of the country. ^ 

We have elsewhere had something to say of the instincts of the 
American people on this subject ; and it may not be amiss to en- 
large upon that point a little in this place. Reason is fallible; but 
instinct never errs. The instincts of animal tribes are the guidance 
of the Divinity within them. Man, too, is endowed with instinct, 
but in an imperfect degree, compared with animals. Reason, a 



THE TARIFF OF 1846. 517 

higher and nobler attribute, was given him, to preside over instinct ; 
but reason is often unfortunate in its dictations. 

If the convicts of all the state-prisons in the United States were 
put to making shoes, and the state should throw them into market 
at a small advance on the cost of the materials and the subsistence 
of the convicts, would it be necessary for the free laborers engaged 
in this pursuit to study and understand public economy, before they 
could appreciate the effects of this measure on themselves ? Their 
instincts would leap to the conclusion with the speed of lightning. 
They would be excited, alarmed. The riotous disposition mani- 
fested in the city of New York, a few years ago, for using the Sing- 
Sing marble, quarried and dressed by the convicts, and called the 
*' state-prison monopoly," which was sold at prices to paralyze the 
arm of free laborers, is directly in point. In the same manner, all 
the free laborers of the United States know that Europe is but a 
prison-house for labor, forcing it to toil for bare subsistence, and 
that it is equally unfair and wrong to force them into a competition 
with such a power as to force shoemakers or stonecutters to com- 
pete with the convicts of state-prisons. And all the business pur- 
suits of the country sympathize with each other. One can not be 
wronged, but all are injured ; and if labor, the great power of the 
country, on which all depend, is depressed, all feel it. Any meas- 
ure of the government that begins to look like an invasion of the 
rights of labor, startles the wide community, and people are 
alarmed. Nor is there any mistake in it ; what all see,, is truth ; 
it is impossible that such instincts should err. 

This is what is called a panic. It is an error to say it is got up. 
Trade never commits suicide ; it never does that willingly which 
is injurious to itself; but it will keep off a panic as long as possible. 
Nor can a (ew interested persons, like the bears in Wall street, 
make a general panic. If they succeed in depressing stocks a lit- 
de one day, they will rise the next. Such a thing as a general 
panic was never known, in any country, without cause. It is the 
quick operation, the infallible foresight, the premonition of the in- 
stincts of the wide community. 

In this manner, the inaugural address of President Polk, on the 
4th of March, 1845, distinctly foreshadowing the downfall of the 
protective system, as one of the great aims of his administration, 
starded the country. The people were enjoying great blessings 
under the tariff of 1842. Labor everywhere found employment 
and reward, and the nation had risen from a long period of suffer- 



§18 THE TARIFF OF 1846. 

ing and calamity, produced by the reign of Free-Trade principles, 
to an unexampled and rejoicing career of prosperity. To iiave 
such a condition menaced, from such a quarter, was alarming. 
Nevertheless, a sanguine people will still hope on, and though 
timid from instinctive dread, they waited for the message of De- 
cember 2, 1845, from which time till the passage of the tariff of 
July 30, 1846, the commercial business of the whole country was 
paralyzed with apprehension. It was the operation of the public 
instincts. Ships in large numbers, ready, or nearly ready, or pre- 
paring, to sail, freighted with wealth, were stopped ; voyages were 
delayed ; orders for goods were countermanded, and others kept 
back ; many, and some vast, schemes of domestic enterprise, with 
a corresponding capital ready to be invested for the employment 
of labor, were arrested ; and all these great transactions, connected 
by a thousand channels and a thousand links with all the other 
great and minor interests of the country, were held in suspense for 
eight long and tedious months, waiting for the blow that was so 
seriously apprehended, the falling of which only demonstrated that 
these instincts of the people were infallibly just. One hundred mil- 
lions of dollars would not, probably, fully indemnify tHe people of 
the United States for all the injury done to their vast and compli- 
cated interests during this agitation, till the consummation of the 
scheme which it proposed to fasten upon the country. What, then, 
must be the sequel ? 

The sequel is yet in the future. It takes years for a great and 
comprehensive measure of this kind, to be fully proved ; and the 
natural results, in their proper and full measure, will be staved off, 
till the crops of Europe and other foreign "parts, shall yield their 
customary abundance; or possibly now, till the extraordinary events 
opened in Europe, beginning at Paris, February, 1848, shall have 
assumed a more settled state. If the want of confidence in Eu- 
ropean institutions, at such a time of general agitation, should in- 
duce European capitalists, in any considerable extent, to transfer 
their funds to the United States, it will of course defer the natural 
effects and full proof of the tariff of 1846 to a still later period, 
by the supply of specie which such transfer of capital would bring 
to the United States, in the same manner as the late failure of the 
European crops did. Nothing but extraordinary events like these, 
tending to bring specie to this country for the time of their con- 
tinuance, can put off the commercial disasters which the tariff of 
1846 is necessarily destined to inflict on the country ; and the 



THE TARIFF OF 1846. 619 

longer they are deferred, the more heavy will be their fall. Enough, 
indeed, has already transpired, in connexion with the experience 
of former years, under the two antagonist systems of protective 
and anti-protective duties, to prognosticate, with a sufficient degree 
of certainty, the coming results. Not less, probably, than a hun- 
dred millions of capital, waiting for the decision of this great ques- 
tion, and ready to be invested in a great variety of enterprises for 
the employment of labor, and for the increased production of pri- 
vate, public, and national wealth, have already been locked up, 
or turned to employments not productive of the general good. 
" Capital," says the Southern Planter, " when not permanently in- 
vested, merely seeking interest annually, is almost sure to do more 
harm than good, because those branches most depressed and in 
debt are the first to come forward to take offered loans, to pay their 
old debts, under the hope that business will revive so as to justify 
the transaction Alas ! soon they become convinced, that the cap- 
italist will absorb all, and end in a break-up for both." Such, all 
know, was the result of the great revulsion of 1836-'7. While 
there was no encouragement for the investment of capital in those 
establishments, and in enterprises, manufacturing and other, which 
employ labor and promote the general good, it turned itself to se- 
cure mortgages on the distressed, and made vastly more profits in 
the end than it could have done in any other way, in the ruin of 
the thousands that asked its aid. Here is disclosed a great princi- 
ple, apparently not discerned by those who have sought, by legis- 
lation, to depress capital, and impair its position relative to other 
interests. They only elevate and strengthen it, positively in some 
cases, relatively in all. They create the very monopoly, the very 
power, of which they complain. Before, it was no monopoly — 
no undue influence, as shown in these pages. But under the tariff 
of 1846, the strong manufacturing establishments which are able 
to stand, will be strengthened by the breaking down of the weak, 
and the consequent greater business they will have. Lowell will 
not suffer, except, perhaps, in its printing establishments and wool- 
len factories. Lowell will stand in spite of the world, and rise and 
flourish on the ruins of all around ; and the greater the general 
ruin, so much greater at least its relative strength, and so much 
firmer its relative position. It is the weak that will be stricken 
down by the tariff of 1846 ; it is the labor of the country that will 
suffer first and most. Capital will always take care of itself. 
Some of it, being so invested as to be assailed by legislation, ma) 



520 THE TARIFF OF 1846. 

suffei , but it will make shifts, and live ; while that which is ready 
to take advantage of the change, will double, or triple, or quadru- 
ple itself, in a short period of general distress. But labor can not 
take care of itself; it is dependent on employment ; it will fall be- 
fore the first rude blast of the storm. He who has contributed, by 
legislation, to silence the music of the hammer, the noise of the 
shutde, the whistle of the ploughman, the song of the boatman and 
sailor, and the varied harmony of industry, has taken away the 
bread of dependent wives and children, clothed them in rags, left 
them to shiver in winter's cold, and drag out a life of sorrow and pain. 
All classes of the people are afloat in one ship, and though tossed 
and pelted by a merciless tempest, they will try hard to bring the 
vessel into port again. They will endeavor to accommodate them- 
selves to their position. The weak will fall, and the laborer will 
find it hard to get bread. The great improvements and enterprises 
of the country will be checked for years. The nation, probably, 
will not go backward ; neither will it go forward. All classes will 
be obliged to stand it as well as they can. This country, thank 
God, has too many resources, for the people to be reduced to 
absolute want, to starvation, before they will see the cause of their 
misfortunes, and be able to apply a remedy. But why should 
such a country suffer such misfortunes, if government was not in- 
stituted to prove how much the people can endure? They have 
gone through it all once, and but recently. Why should they be 
compelled to go through it all again ? 

The fall in the prices of labor, under the tariff of 1846, will not 
probably be so early, or so great at an early period, as some have 
apprehended; but the final result can not be avoided under such a 
system. It has not been easy, down to this time, to obtain a full 
supply of labor for the manufactures of the country, because the 
demand calls laborers off from other pursuits, and requires an ap- 
prenticeship. All those manufacturers, therefore, who have any 
hope of standing, or who are obliged for the present to continue, 
will also be obliged to keep up the wages of labor as long and as 
high as they can — even after their business may have become a 
losing one — in hope of a favorable change. The disastrous effects 
of the new tariff will fidl first, and continuously, on the weak, to 
make them weaker, and on the poor, to make them poorer ; while 
the strong will grow stronger — at least relatively, in some cases 
positively — and the rich richer. 

When weak manufacturers, and other employers of labor who 



THE TARIFF OF 1846. 521 

are comparatively weak, are obliged to suspend their business, 
there will then be a surplus of labor seeking employment; and as 
in every other case of surplus, no matter what, prices will fall. 
They may fall rapidly and greatly. Such will unavoidably be the 
effect, when there is much labor out of employment. It is in such 
a state of things, when the weak break down, and the poor are suf- 
fering for want of something to do, that the rich grow richer, and 
the strong stronger, because they are able to take advantage of 
cheap commodities, cheap labor, and of the necessities of those 
who are trying to get along by borrowing money at exorbitant rates, 
most of whose estates fall at last into the hands of their creditors. 
Such, precisely, as before described, and as most people remember, 
to their sorrow, was the state of things, before the tariff of 1842 
came to the rescue and relief of the country. 

To show how the tariff of 1846 "will operate on the labor of 
the country, and the interests which sustain labor, the table in the 
note below was prepared by the Hon. Mr. Stewart, of Pennsylva- 
nia, while the tariff of '46 was under debate, and requires no altera- 
tion, as the bill as to these items, passed precisely as it stood then, 
and is now part of the law.* 

• " The operation of this bill," said Mr. Stewart, " upon the national industry, 
will be seen from the following: examples, assuming that the reduction of wages 
wiilalwaj's be in proportion to the reduction of protection, and that as home con- 
sumption can not be increased, home production must be diminished to the extent 
of the increased importations : — 

Importations Est. increase Duties of Tariff 
under the imports unJer of '42, as per Mr. Duties of Tariff 

Employmenta, &c. Tai iff of 1842. Tarift" of '46. Walker's report. of '4C. 

Shoemakers .■• $42,250 $45,000 45 per ct. 30 per ct. 

Tailors..... 1,173,028 200,000 50 " 30 " 

Blacksmiths — 200,000 61 « 30 « 

Hatters 16,646 110,000 49 " 30 -« 

Tanners 128,277 100,000 40 « 20 « 

Iron-makers 4,489,553 1,185,000 75 " 30 « 

Miners of coal 223,919 5,150,000 67 « 30 « 

Glass-makers... 106,905 100,000 90 « 25 « 

Paper-makers. 51,724 150,000 75 " 30 " 

Hemp, cordage, &c 355,875 275,000 65 « 25 « 

Lead — _ 92 « 20 « 

Pins 45,078 50,000 70 " 20 « 

Nails and spikes — — 66 " 20 « 

Manufactures of wool 10,057,875 2,000,000 40 « 30 « 

Manufactures of cotton — — 90 " 25 " 

Manufactures of silk — — 42 « 25 « 

Salt 898,663 1,000,000 76 " 20 « 

Sugar 4,780,555 630,000 75 " 30 « 

Brandj-^ and spirits distilled from grain, &c. — 180 " 100 " 

Wool 1,689,794 200,000 40 " 30 " 

Blankets — _ 30 " 20 « 

Potatoes 58,949 150,000 36 « 20 « 



522 THE TARIFF OF 184C. 

It is clear, that the tariff of 1846 must ultimately either fail of 
its object as a revenue measure, or cripple the labor of the country 

This table might be extended much farther; but it is sufficient to exhibit the 
practical operation of the new tariff on labor, so long as that measure answers 
any purpose for revenue ; and on labor and the currency, v/hen the revenue shall 
fail ; for the act, as a revenue measure, will not fail entirely, till, and only because, 
labor and the currency are both broken down. 

The various branches of American labor named in the above table, will of course 
see the amounts, respectively, by vhich their occupations are to be curtailed, in 
the operations of the new tarifl'. They read their doom in the second column. 
That is the amount of business of which they are to be deprived. They are the sec- 
retary's own figures. He openly proposed, in his report, to subsiilute the products 
of European labor for those of American ; and this is the way and the measure of 
doing it. Mr. Stewart says : — 

"The question, then, is distinctly presented to all these mechanics, manufac- 
turers, and farmers, whe^ier they are prepared to submit to these reductions in 
their prices and wages, or give up the market to foreigners ? One or the other 
they must do — and why ? The secretary says, to increase the revenue; but this 
is manifestly not true; for when you take all the increase of imports the secretary 
himself estimates, and assess on these the proposed reduced duties, there will be, 
on his own showing, a loss instead of a gain of revenue. Then why the proposed 
reduction ? To substitute /brngw for .American fabrics, as declared in the secre- 
tary's report. To fa.vor foreigriers by breaking down American mechayiics, mamt- 
facturers, and/armers." 

The following authenticated facts which have already transpired, in relation to 
some other items of American industry and art, not mentioned in the preceding ta- 
ble, are sad monitions of the fate in store for American labor, under this unfortunate 
measure. Under the tariff of 1842, the imports into the United States from Eng- 
land of plain calicoes, were, for 1844, 9,661,820 yards; for 1845, 12,412,908 yards; 
for 1846, 10,640,215 yards. But behold the effect of the tariff of 1846. These 
same imports in 1847, from England, amounted to 41,519,224 yards, being an ex- 
cess of about 30,000,000 of yards a year over the average imports under the tarifi 
of 1842; or an increase of nearly 300 per cent. There was also for 1847 just 
about the same excess of imports of printed and dyed calicoes, over those under 
the tariff of '42. The following items mark these excesses of imports, severally, 
for 1847, over the average of the years under the former tariff. 

Calico, yards 30,879,029 

Lace, yards 4,669,340 

Cambrics and muslins, yards 1,048,654 

Cotton and linen, yards 518,381 

Cords, velveteens, &c., yards 200,082 

Calicoes, printed and dyed, yards 30,868,508 

Total yards increase 68,183,904 

Threads, lbs 419,945 

All this has in one year been snatched from the hand of American industry and 
art, by the tariff of 1846, and given to foreign artisans and factors; that is, enough 
to give three yards, and more, to every man, woman, and child, in the United 
States. And what is more, the price of each of these articles, which had the 
promise of being reduced by the new tariff, is quoted higher in the British market 
for 1847, than for either of the three preceding years. But this is only the begin- 
nini» of the end. When we shall have the full account of all those excesses <rf 



THE TARIFF OF 1846. 523 

and destroy its currency. It will undoubtedly do the last, and to a 
great extent accomplish the first. That it will do the last, is proved 
from experience. No system of low, anti-protective duties, has 
ever been in operation in this country, without these results, as has 
been abundantly demonstrated in ihese pages. Importations, in all 
such cases, flood the country, as long as there is money to pay for 
them ; and when that is gone, to the breaking point of credit. Of 
course, and uniformly, the money being gone, and credit failing, the 
currency fails, and labor is prostrate, first on account of low wages, 
and next for want of employment. Cheap foreign labor has done 
that which American labor ought to have done — has superseded 
the latter, by being imported in the shape of manufactured goods 
— has surfeited the market, and produced universal stagnation. 
When trade languishes, for want of money and credit, labor is the 
first and chief sufferer. 

The tariff of 1846 is doubtless sufficient to accomplish these 
objects, in its experiment as a new revenue system ; and before it 
shall have half done it, it will itself fail for purposes of revenue. 
When duties were on the same scale, in the last year of the com- 
promise act, called the fiscal year of 1842, the revenue from cus- 
toms ran down to about twelve millions and a half, which is less 
than half the average product of the tariff of 1842. There is 
litde reason to suppose that the tariff of 1846 will do better than 
this in the end; for how can the country afford to buy so much 
any length of time ? These excesses of imports may fill the treas- 
ury for a year or two ; but the money of a spendthrift is soon gone. 

There is one mode, some time in use, in disposing of surplus 

accumulations of manufactured goods in England and Europe — 

and It applies to all kinds of manufactures — which is not commonly 

observed, and which is the worst of all for American interests of 

manufacture, trade, and labor, besides being extremely difficult to 

control. These surpluses are constantly accumulating In Europe, 

not only by regular production, in the hands of manufacturers, but 

by bankruptcies. They are dead property at home, and must be 

disposed of in some foreign market, at ivhatever sacrijice. The 

inquiry in all such cases is, " What market is the best ?" And 

the uniform answer is, "The United States — New York ;" and 

imports under the tariff of 1846, over those under the tariff of 1842, in manner 
as above — excesses which have raised thirty millions of revenue under the reduced 
duties — it will be yet a sadder tale for American labor, though this evil will 
doubtless be abated, in no inconsiderable degree, by the previouslarge imports of 
specie for American breadstuffs sent to supply the wants occasioned by famine. 



524: THE TARIFF OF 1846. 

hither they are shipped and consigned, with orders to be sold by 
private negotiation or by auction. Sold ihey nnust be and will 
be, at whatever price they will bring, generally at a sacrifice on the 
cost of production in Europe. A house in New York received a 
large consignment of goods in this way, in 1846, and sold them at 
an average of less than 50 per cent, of the original cost of produc- 
tion. This business, as is known to the merchants of New York, 
is done on a large scale. It h forcing off the goods. Nor is this 
mode of sale limited, either as to quantity or time, but unlimited. 
It is a regular, uninterrupted, systematic trade, carried on for more 
than twenty years, to dispose of surpluses on hand in Europe. 
As the sources are inexhaustible, embracing all kinds of manufac- 
tures, without the application of a legislative remedy, the flood is 
destined apparently to increase, and to overwhelm the labor and 
manufacturing interests of the country, together with American im- 
porting merchants. It will naturally be vastly augmented by the 
low duties of the tariff of 3 846. Nor can any remedy be found, 
short of a union of state and federal legislation. So long as the 
laws of the state of New York impose but IJ per cent, duties on 
foreign goods sold at auction, the practice can never be arrested. 
In this way, all the regular manufacturing and importing business 
of the country is endangered, and American labor is doomed to fall 
with it, necessarily and unavoidably ; for, in such a case, American 
labor has to compete, not with the low-priced labor of Europe at 
par, but at a discount, sometimes of 50 per cent. ; that is, with the 
pauper labor of Europe at half price, the average of which is about 
one sixth, or 17 per cent, of the average price of American labor. 
American merchants and manufacturers are first injured ; but it all 
ends in depriving American labor of its rights. 

It may perhaps be said that this is all for the benefit of consu- 
mers. But it does not operate so. It is the sole benefit, first, of 
those holders of these surpluses in Europe, who can not otherwise 
dispose of them ; next, of the jobbers, who make the first purchase, 
and thirdly, of the retailers. Before they get into the hands of 
consumers, the prices are up to the ordinary level. The whole 
tendency of the operation is to injure the regular trade and the labor 
of the country. 

A few words are due on the discriminations of the tariff of 1846 
against labor, manufactures, and the arts. It has been pretended 
that England and the United States are marching, with equal strides, 
toward the goal of Free Trade. It is elsewhere shown in this work. 



THE TARIFF OF 1846. 525. 

that the recent alterations of the British tariff, alleged to be of this 
character, have been made on the principle of Protection, generally 
or specifically. When the Manchester and other British manufac- 
turers ask for what is there called Free Trade, they ask it to fortify 
their own position in relation to the rest of the world, hoping their 
example will be followed by other nations, and believing them- 
selves strong enough, for the most part, to defy and break down 
competition on this pretended basis of free ports. It is remarkable, 
however, that they do not ask for the remission of the differential 
duties in their favor, in supplying the wants of British dependen- 
cies. Mr. Edwin Williams, than whom a more reliable authority 
in such matters could not be cited, in an article in Fisher's National 
Magazine for September, 1846, has clearly shown, that the late 
abatements of duty in the British tariff, vaunted so loudly as Free- 
Trade reductions, if so nominally, are quite the other way in their 
practical operation. He has proved, in the first place, that the reve- 
nue sacrificed is trivial, and that they gain on that score more than 
they lose. But secondly, the most important point established is, 
that these numerous changes, except that of the abolition of the 
corn laws, have been made directly — abolition of corn laws indi- 
rectly — for the protection of British manufactures and arts, by the 
abolition of duties on raw materials, and partially manufactured ar- 
ticles imported for their perfection by British skill and labor. 
Whereas, the American tariff of 1846 has imposed duties in these 
very quarters where the British tariff has taken them off, not only 
withdrawing protection from American skill and labor, but taxing 
them, as the following comparative table, prepared by Mr. Williams, 
and representing, in these particulars, the tariffs of 1846 and 1842, 
with the British tariff for the same, will show. It will be found in 
the note below.* 

Tariff of 1846. Tariff of 1842. British Tariff. 
* Coarse wool 30 per cent 5 per cent free. 



Raw hides and skins 5 

Wood, mahogany, &c 20 

other kinds, except timber. 30 

Antimony, crude 20 

Barilla 10 

Bark of the cork-tree 15 

Berries used for dyino[ 5 

Brimstone, or sulphur 20 

Dyewoods 5 

Ebony 20 

Cochineal 10 

Crude saltpetre 5 

Burr stones, unwrought 10 



. 5 « free. 

.15 « free. 

. free. free. 

.free. free. 

.free. free. 

. free. free. 

.free. free. 

• free. free. 

.free. free. 

.free. free. 

.free. free. 

free. free. 

. free. free. 



526 THE TARIFF OF 184G. 

The effects of the famine in Ireland, and of the scarcity of bread- 
stuffs in Europe, in 1846 and 1847, making a market for American 
bread-stuffs to an unprecedented amount, have been held up by 
the advocates of Free Trade in this quarter as the fruit of the tariff 
of 1846. What, then, has produced the cessation of that demand, 
under the same tariff ? Such a reason vi^ould rather make the tariff 

Tariff of 1 84fi. Tariff of 1812, British Tariff. 

BrasSjOld 5 percent free. 

Gum Arabic 10 " free. free. 

India rubber 10 " free. 

Kelp 10 « free. 

Kermes 5 ** free. 

Precious stones 10 " 7 per cent free. 

Pearl, mother of 5 " free. ........ free. 

Ivory, unmanufactured 5 " free. free* 

Madder 5 " free. free. 

Palm leaf, unmanufactured. . . 10 " free. free. 

Ratans and reeds, do 10 " free. free. 

Shellac 5 « free. free. 

Sumac 5 " free. free. 

Weld 5 « free. free. 

Tin, in sheets or plates 15 " 2| per cent. 

Tin, in pigs, bars, or blocks. . . 5 " 1 " 

Tortoise shell 5 " 5 " free. 

" We might extend this list," saj's Mr. Williams, " but enough is given to show 
the comparative legislation of the American and British governments, with regard 
to raw materials and other articles essential for the use of manufactures and in the 
arts. While the British parliament are removing all duties on articles required 
for the use of their manufacturers, our American Congress have increased the bur- 
dens of our manufacturers, by additional duties on the raw materials imported for 
their use; at the same time that they have reduced the protective duties. Was 
there ever a parallel case of injustice in the history of legislation in any country ? 
" Several classes of articles used in manufactures, which pay small specific rates 
of duties by the tariffof 1842, have been changed by the new tariff [of 1846], and on 
most of them the ad-valorem rates will be higher than the specific rates now paid. 
The following will serve as specimens, taking the duties actually paid on the last 
importations, by the report of the secretary of the treasury : — 

Rates of Tariff of 1842. Equal to. Rates of Tariffof 1846. 

Indigo 5 cents per pound. .... . 6| percent 10 percent. 

Bristles I cent do 2 « 5 " 

Flax $20 per ton 10 « 15 " 

Paper rags 25 cents per 100 lbs 6| " 5 " 

" On all the previously-named articles, it will be observed, the duties are in- 
creased, except rags, on which there is a small apparent reduction on those of the 
quality imported last year. 

" The importance in amount of raw materials and other articles imported for our 
manufactures, is shown by the following statement of the value of part of those 
articles imported, for the year ending June 30, 1845 — (the last returns). Let it 
be borne in mind, that while our government withdraws a large proportion of the 
protection to our manufactures, by reducing the rates of duties on articles imported 
coming in direct competition with them, it taxes them with additional duties on the 



THE TARIFF OF 1846. 5@t 

of 1842 the cause, as the prices of American bread-stuffs were 
higher in the winter of 1845-'6, under that tariff, than in the win- 
ter of 1846-'7, under the latter tariff. The great demand arose, 
and the prices mounted to the highest pitch, under the former, and 
both have fallen off under the latter, and are tending rapidly to the 
old level, and peradventure will yet be less than ever. What is 

raw materials used ; as if intentionally to deprive them of the ability of competing 
with the British manufacturer, who obtains the like raw materials free of duty. 

** Value of Articles imported, principally for the Use of Manufactures, in the year 
ending June 30, 1845. 

ARTICLES PAYING DUTY. AmOUnt. 

Coarse wool $1,553,789 

Mahogany 261,292 

Rose wood 18,9 12 

Satin and cedar wood 18,878 

Indigo 862,700 

Bristles 172,076 

Flax 90,509 

Rags ■ 421,080 

Block tin and other articles, at 1 per cent, duty 21 2,975 

Tin, in plates or sheets, &c., at 2| per cent, duty 1,690,460 

Raw hides and skins, &c., at 5 per cent. duty. 1,975,103 

7,277,674 

ARTICLES FREE OF DUTY. 

Dyewood, in sticks 603,408 

Wood, unmanufactured 87,315 

Burr stones, un wrought .; 32,624 

Brimstone and sulphur 108,619 

Bark of the cork-tree 8,812 

Barilla 22,9 17 

Nuts and berries, used in dyeing 132,490 

Clay, unwrought 14,670 

Articles not enumerated 2,958,563 

Total 1 1,247,092 

"It is within bounds to say, that the additional taxes imposed on the manufac- 
turer by the new tariff, on raw materials alone, will amount to at least 10 per 
cent., or over one million of dollars, unless we suppose that the operation of this 
tariff should reduce or destroy, as it probably may, -some branches of manufactures, 
and thus diminish the tax imposed on them. Compare this effect with the new 
British tariff, which releases the more favored manufactures of Great Britain from 
taxes on raw materials formerly paid, amounting to more than five millions of 
dollars. 

" The great leading interests of national industry' which will be most affected by 
our new tariff, are the manufactures of iron, cottons, woollens, leather, paper, ma- 
chinery, lead in its various branches, glass, ready-made clothing, and cordage. 
Many other branches of manufactures might be mentioned, which will be affected 
directly or indirectly. Indeed, we apprehend all classes, who depend on their daily 
labor for subsistence, will sufl'er by this blow at our protective system ; for while 
the great manufacturing interests we have mentioned are prostrated, the country 



528 THE TARIFF OF 1846. 

the cause of this? To ascribe these results to legislation, either 
of Great Britain or of the United States, or of both, is proving too 

can not be prosperous; and if the condition of the people will not sustain the pres- 
ent or recent demand for articles of consumption, how can those classes of mechan- 
ics, manufacturers, and others, who seem to be protected by the new tariff, flour- 
ish, with a diminished and constantly-decreasing market for their fabrics ? 

"We might also notice those branches of industry which have recently sprung 
into existence, or have exhibited signs of life and excited hopes for the future; but 
which infantile manufactures must be checked or destroyed, under the operation 
of the new tariff. Among these, the important interest of silk should be named as 
the most prominent. The tariff of 1842 wisely fixed specific and other protective 
rates of duty on manufactures of silk, which were considered absolutely necessary 
to sustain this new branch of industry, and under those auspices it has been fast 
growing into importance, exciting the most lively interest in many parts of the 
Union. The new tariff repeals the specific duties on silk, and fixes a low rate of 
ad-valorem duties, leaving the enterprising and industrious citizens who have en- 
gaged in its cultivation and manufacture, at the mercy of foreign competition. 

" Thus, then, we see that the present approaches to what is erroneously called 
* Free Trade,' is in England one thing, and in the United States another. In 
England, it is to lay the heaviest duties on the great articles of tobacco, tea, coffee, 
distilled spirits, sugars, and wines, not one of which is produced in the realm, but 
which are largely imported, and which pay two thirds of the whole customs reve- 
nue, and to remove the duty from every species of material that enters into manu- 
factures of any kind, thus sustaining the industry of her working classes. While 
in the United States, what is called ' Free Trade,' or an approach to it, is to reduce 
the duty on all manufactured goods, and to increase it to the destruction of the 
working classes, on many raw materials, as we have already shown. 

" Does not this establish, beyond all dispute or cavil, that no such thing as * Free 
Trade' now exists, or can exist ? and that while England, our great rival, is doing 
everything she can to foster and sustain her superiority in manufacturing, our 
present rulers are playing most completely into her hands, and rendering us more 
and more tributary to her, while lessening our ability to pay for every foreign pro- 
duction imported into this country ? 

" The plain truth is, and it is folly to attempt to conceal it, that the worst evil, 
the skill, capital, and labor of this country have to contend with, is its own present 
government, who, not content with demanding specie in all payments made to them 
by the people, have, by the enactment of the tariff of 1846, legislated against Amer- 
ica, and in favor of England." 

Though not, perhaps, directly in place, yet having been left out where it more 
properly belonged, it is worthy of remark, that the anti-corn law league of Eng- 
land originated with British manufacturers, with a view ultimately to reduce the 
wages of labor. The same men, manufacturers (see first annual report of poor law 
commissioners), who were engaged in 1834 in dragging paupers, against their will, 
from the south of England, 10,000 in a single group, to immure them in the man- 
ufactories of the north, professedly, as appears from their letters to the commission- 
ers, to counteract 4he trades-unions and keep down the strikes — in other words, to 
keep down wages — were afterward enrolled among the most influential leaders of 
the league for the abolition of the corn laws; and Sir Robert Peel, naturally sym- 
pathizing with that system, which had been to him "the goose that laid the golden 
egg" (his immense fortune was made in manufacturing), and not less as a great 
statesman, put the finishing stroke to that great measure for the conservation and 
protection of the British manufacturing system. The first step was forcing the 



THE TARIFF OF 1846. 529 

much, as breadstufFs have been higher in England when Free Trade 
there said they would be lower, and as our own tariff of 1842 did 
better than that of 1846, in raising the prices of these articles, if 
either had any influence of this kind. But all know that legisla- 
tion has had no more to do with this matter than it has with the 
profits of an epidemic to the medical profession, or with the want 
of such profits in the return of general health ; and none but men 
of intellectual or moral, obliquity would ever resort to such rea- 



paupers of England, in 1834, into the manufactories ; the next was the removal of 
duties on raw cotton, in 1845; and the third was the abolition of the corn laws, in 
1846: all done on the principle of Protection, and to maintain the system of low 
wages, without which British manufactures, the soul and bulwark of the empire, 
must have fallen. It is now confidently expected and predicted, that, as soon as 
decency will permit, the wages of operatives in British manufactories will be re- 
duced, by a measure equal to the cheapening of their bread, that the benefit of the 
aholition of the corn laws may accrue, not to the laborers, but to their employers; 
in other words, to the government ; for the government support these great inter- 
ests, that they may support the government. The amount of wheat used for paste 
in the cotton factories, is said to be equal to the supply of all the mouths of the 
operatives. Eight hundred thousand bushels are used annually for paste by mem- 
bers of the anti-corn law league, from the tax on which they are relieved by the 
abolition of the corn laws. 

This great measure, therefore, which has been bruited far and wide, to the great 
astonishment of mankind, as a Free-Trade measure — or the movement of a great 
nation in a philanthropic career, to give the poor cheaper bread — turns out to be 
the movement of British manufacturers, to bar the necessity of raising the wages 
of their operatives, and in the end to cheapen them ; and of the British govern- 
ment to sustain and protect the British manufacturing system, as the great bulwark 
of the empire. Sir Robert Peel saw, that the British corn laws, or the manufac- 
turing system, must fall, and he wisely sealed the doom of the former, to save the 
latter. 

It will be seen, then, what this flourish of British Free Trade amounts to, viz., 
that at bottom, in principle, and in its ultimate practical design, it is directly the 
opposite of Free Trade, and that it is one of the most comprehensive and most 
eflfective measures of Protection ever devised by a statesman. 
34 



530 THE CONTINGENT DESTINY OF THE UNITED STATES. 



CHAPTER XXXIII. 

THE CONTINGENT DESTINY OF THE UNITED STATES. 

The Contingencies of Free Trade. — Review of our Commercial History, as it discloses 
Contingencies. — What makes a Sound Currency. — As a Man that fails frequently in 
Business can not get rich, so neither can a Nation.— The possible Destiny of the Country, 
under a Protective System, grand and glorious. — Free Trade devours all, and then eats 
up itself. 

That tlie destiny of the United States is contingent^ is evident 
enough : contingent as to whether the nation will adhere to its 
original principles ; contingent as to whether it will continue for ever 
a republican ennpire, or degenerate into monarchy ; and contingent 
as to whether it will maintain a protective system, or abandon it 
for Free Trade. It is this last-named contingency only which we 
propose to consider. It is believed that the preceding chapters 
afford sufficient data to run out the line which this contingency 
indicates. 

As to the alternative of adopting the policy of Free Trade, one 
would suppose that we have had experience enough to render that 
morally impossible. But no one can tell beforehand what folly a 
nation will be guilty of, nor predict the misfortunes into which, by 
such means, it may be plunged. Since the federal administration 
has so recently, and for the first time in the history of the country, 
abandoned the policy of Protection, declared itself for Free Trade, 
and caused to be adopted corresponding measures, it must be con- 
fessed that such facts are not ominous of good. But as the bitter 
experience of past measures of the same kind can not but be again 
renewed ere long by the operation of these, there are many chances 
that the lessons of this schoolmaster, which, as one has said, '* charges 
high wages," will avail much to rectify the views of the public 
mind, and bring back the nation to its senses. If the history of 
the past is reliable evidence of the future, that like causes will con- 
tinue to produce like effects,, it is not difficult to determine the 
destiny of fhe United States, under a Free-Trade policy. The 
commercial embarrassments of the country from 1783 to 1790, 
under the confederation, for want of power in the states to unite in 
a system of protection, constitute a formidable class of facts, shed- 
ding light on this point. The period of some five to seven years 



TEE CONTINGENT DESTINY OF THE UNITED STATES. 531 

antecedent to the tariff of 1824, is another melancholy cycle of our 
commercial history, replete with general distress and ruin, all for 
want of a protective system. And is it necessary to bring to view 
again the facts of like character, several limes presented in this 
work, which so disastrously signalized the period of some half- 
dozen years antecedent to the tariff of 1842, and which brought 
the country to the brink of commercial ruin, all for want of a 
protective system? Can the future fail to justify the past? Is 
there not light enough in this history? — We have before us, 
then, the certain destiny of the United States, under a system of 
Free Trade. 

Of all reasons that can be urged in favor of a protective policy, 
no one perhaps can be named of greater cogency than its necessity 
for a good and adequate currency. The currency of the country 
— a sound currency — does not depend on banking, or the modes 
of banking, or whether banking be done by a national institution, or 
by state corporations, Or by both, or by neither, though doubtless 
there is a choice in modes — a better way. There can be no 
sound currency where there is no money ; and there never can by 
money enough for the currency of a country which is constantly 
sending off more than it brings back — unless one of its products 
DC money, as has been the case with Mexico and some of the 
South American states. In that case, money is not the medium, 
but an article, of trade. But the United States do not produce 
money in any quantity sufficient to rely upon, either as an article, 
or basis, or medium of trade. We are obliged, therefore, to de- 
pend on getting and keeping money enough hij trade to answer the 
purposes of a currency. 

A man may have a very large estate, well stocked, well worked, 
and be making extensive improvements ; but if he buys more than 
he sells, his money, or active capital, is all (he while growing less ; 
and unless he has a great deal of it, he will soon find himself em- 
barrassed. When this state of things arrives, he is precisely in 
the condition of a nation that has been guilty of the same improvi- 
dence. Without money, neither he nor a nation can do business 
to advantage. An income is as necessary to a nation as to a pri- 
vate Individual ; and (he income of a nation is the money it gets by 
selling more than it buys. While this is the case, it is impossible 
that the currency of a nation should be bad or inadequate. A 
bank here and a bank there may fail, as private individuals do, and 
for like reasons of mismanagement or misfortune ; but there can 



532 THE CONTINGENT DESTINY OF THE UNITED STATES. 

be no such thing as a general bank suspension when the public 
policy is such as to secure the coming in of more money than goes 
out, or when there is enough in to prevent more going out than 
comes in. These results, in one case or the other, are always con- 
tingent on the sufficiency or insufficiency of the protective policy. 

The intimate and indissoluble relation of the protective policy to 
the currency of the country, commends it, therefore, as a point for 
consideration too important to be overlooked. No man can trade 
safely, and with a warrant of prosperity, except on the basis of a 
credit which solid capital affords, and with guch means as that 
credit will constantly supply him. The moment his means, and 
with his means, his credit, fail, he is slopped. There is no use in 
his trying to go on ; it is impossible, except by a transient career 
of fraud, which only makes it worse when he is found out. 

It is precisely the same with a nation in its trade with the rest 
of the world. When, for the lack of an adequate protective policy 
— which is the same thing as the improvidence of a spendthrift — 
it is habitually buying more than it sells, and its money goes off to 
settle balances, its means of trade, domestic as well as foreign, are 
all the while growing less and less ; and without a change, a reform, 
that nation must fail. Its insolvency is as inevitable as that of an 
improvident individual who conducts business on the same prin- 
ciples. The way in which the insolvency of a commercial nation 
shows itself is, first, by a scarcity of money, which everybody feels : 
as a consequence, a general contraction in all monetary operations, 
by which business is carried on, necessarily drawing along with it 
commercial inactivity, dulness ; diffidence in all credit transactions ; 
and at last, if no relief comes, the banks suspend. This last act 
is the consummation of a nation's commercial insolvency. The 
banks, at the moment, and during the whole time of suspension, 
may be sound, as the specie in their vaults is not the exponent of 
their capital. Being allowed by their charters to issue more paper 
than they have specie, the heavy commercial exchanges against 
the country operate directly on their vaults, to draw off the specie 
into foreign parts, and they are compelled to suspend, or part with 
the last cent. Even then they must suspend, so long as they have 
more paper out than specie in. It is the unfavorable state of for- 
eign exchanges, the large commercial balances against the country, 
which occasion a general bank suspension. It is because there is 
not money enough in the country to pay its debts ; and like a mer- 
chant, who finds himself in a like condition, to avoid complete and 



THE CONTINGENT DESTINY OF THE UNITED STATES. 533 

irretrievable ruin, that would incapacitate the country for all trade, 
the banks stop payment, to the injury of their own credit and the credit 
of the country. They can not help it. They are forced into it by 
the effect of the policy of the government, which tempts the people to 
buy more than they sell, and the nation to do the same, till, after 
repeated and long-continued drafts on the money of the country, 
the pressure begins to be felt ; and before the remedy can be ap- 
plied — for it is too late when the effects of such improvidence 
have already come — the whole community is involved in the gen- 
eral calamity. It is only for the want of an adequate protective 
system. So long as an industrious and producing nation does not 
buy more than it sells, it is impossible it should be involved in 
general commercial distress — absolutely impossible in the nature 
of things.' A nation of such resources and wealth as the Uni- 
ted States, with such an enterprising population, can bear a great 
deal of loss in its foreign trade, and yet prosper. Think of seven 
hundred millions of loss in a half-century, as appears from the facts 
exhibited in chapters xxiv. and xxv. (see p. 402). This has been 
more than the nation could bear ; and hence its frequent calamitous 
vicissitudes. Under an adequate and uniform protective policy, 
such disasters could never come. There can not be an effect with- 
out a cause. Such a country as the United States, which is a 
world in itself, and capable of producing everything essential to 
the complete and perfect independence of a nation, in' articles of 
luxury as well as necessity, ought never, by the improvidence of 
legislation, to be in debt to other nations. There is no apology for 
it. It has sometimes been said that such a state of things comes 
from the fault of the people. But this will not answer, so long as 
the government permits the foreign factor — who is not a citizen, 
and who has no other interest than to make his fortune, and then 
carry the money away — to bring his goods and merchandise, with- 
out paying for the privilege ; or, if he pays, pays nothing adequate 
to protect American citizens in the same business ; and thus tempts 
jobbers, and jobbers tempt retailers, and retailers t»mpt the people, 
till the latter are in debt, which can only be discharged by a re- 
mittance through the same channels backward ; and the foreign fac- 
tor departs with the money of the people in his pocket. The par- 
ties concerned in all the stages of the trade, have doubtless profited 
by it ; but the people are ruined, because their money has gone out 
of the country, and they have little or nothing left to pay other 
debts, and do business with. 



534 TWEf CONTINGENT DESTINY OF THE UNITED STATES. 

It is remarkable that all the commercial troubles of the United 
States have occurred under a system of low, anti-protective duties, 
as has been several times proved in the progress of this work ; that 
the country has never prospered, except under a protective system ; 
and that it has uniformly been most prosperous under the highest 
protective duties. These are historical facts. These fluctua- 
tions, from prosperity to adversity, and from adversity to prosperity,* 
sometimes greater and sometimes less, in the history of the country, 
have been fully explained on the principles of the opposing sys- 
tems of a protective and anti-protective policy, as having been 
graduated precisely as the one or the other of these has prevailed, 
the facts always harmonizing with the theory, that protection is 
favorable to prosperity, and llie want of it unfavorable. 

It follows, therefore, that nothing was necessary from the begin- 
ning of our history as a nation, to have secured uninterrupted com- 
mercial prosperity, and an uninterrupted sound currency, but a 
uniform and adequate protective system. The state of the cur- 
rency, as has been seen, always agrees with the presence or ab- 
sence of protection, and the reasons have been explained. What, 
then, would have been the state of the country at this moment, 
comparatively, in wealth, greatness, and power, if it had not been 
so repeatedly broken down for want of protection ? The answer 
will be found in the history of any two men engaged in business, 
one of whom never failed, and tl)e other of whom has failed many 
times. Look at the fortunes accumulated by Stephen Girard, of 
Philadelphia, by John Jacob Astor, of New York, and by many 
other men of the same class, who never failed. ]f any of them had 
broken down a plural number of times, as the United States have, 
by an impolitic cliange in their habits, by an experiment, as enter- 
prising men they might still have mended their fortunes by correct- 
ing their habits, after each disaster; but they would never have 
attained to great wealth. Thus might the United States have be- 
come, even by this time, the richest, greatest, most powerful na- 
tion on earth, if^t had established at the beginning, and maintained 
througliout, an adequate and uniform protective system. That it 
would, at least, have become greatly rich and greatly powerful, 
compared with its present condition, is as certain as thai John 
Jacob Astor was a rich man. How can a man, or a nation, always 
engaged in a large and prosperous business, and never coming to 
bankruptcy, but ever going farther from it, fail to be rich? How 
can a man, or a nation, whose annual income is greater than the 



THE CONIINGENT DESTINY OF THE UNITED STATES. 535 

expenditures, fail to accumulate? But let a man, or a nation, fre- 
quently fall into bankruptcy, by improvident habits, and that man 
and that nnlion will be always weak, always in trouble ; or, if re- 
lieved by a new and more prudent start, by a like improvidence 
will break down again. Such, and for this reason, has been the 
ever-changing commercial history of the United States. 

" The first duty of all good government," says the Southern 
Planter, " is to look to its labor — insure it not only full occupa- 
tion, but the greatest productiveness. Political economy abhors 
idleness worse, if possible, than Nature does a vacuum. It is 
worse than a vacuum, because gravity rushes forth to fill the vacu- 
um ; but idleness is a grave, where lies dead and buried the crea- 
tive genius of man — the means given to him by the God of Nature 
to improve his condition. . . It would appear to one dropped from 
another world, unacquainted with all our interests and resources, 
that our whole Congress or national legislature were taken or sub- 
sidized by Europe to favor all their productions or operations ex- 
clusively — even to the total disregarding of those of this country. 
It would seem to such that Great Britain sat enthroned in all our 
legislative halls, and dictated all their enactments regulating indus- 
try and a tariff; and if told otherwise, could not be made to beheve 
that some laws and most important regulations were not the results 
of bribes on the body politic by the superior wealth and foresight 
of older and wiser nations. Every idle finger will be pointed some 
day against those short-sighted and unpatriotic legislators who left 
it in sloth, and to vice and mischief, instead of stimulating it to 
proper action and usefulness. . . This country, like a young giant, 
knows not its own strength, or its resources, because it has never 
exerted the one, or examined the other. Nothing is wanted to 
bring forth all this, but a permanent policy, a certainty of protec- 
tion, a security of« the home market. All would then come forth 
and show themselves — capital, labor, raw materials, a market, 
wealth, comfort, elegance, taste, and independence. As soon as 
confidence was established, they would flash forth, as the gas-Hghts 
when touched by a match. No country is underlaid so universally 
with valuable minerals ; and they lie in its extended fletz, or sec- 
ondary formation, in horizontal strata, that can be followed into 
the thousands of hills and ridges, and, lying above the valleys, 
can be poured forth, without shafts or drainings, to the fertile 
plains, water-powers, and navigations, that are there found. Had 
this young giant, with its free limbs, hold of these mines of wealth, 



536 THE CONTINGENT DESTINY OF THE UNITED STATES. 

in the real skilful way, he could glut and monopolize all markets, 
in both the raw and wrought state. These hidden treasures need 
a protecting tariff to uncover them — its inducement to make them 
available, and wiser statesmen than we yet have, to put all in train, 
and on the certainty of the reality. . . When the fulcrum is 
furnished by Nature's God to this young Archimedes [the United 
States], it still fails to move the commercial world. Our commerce, 
if we demanded it, might double with England around the great 
capes of South America and Africa, and sweep the bays of Bengal 
and Bombay ; might scour with her the West Indies ; might run 
with her through all her various colonies ; and in every port, place, 
colony, and in the mother-country, be a part of herself as to the fa- 
cilities secured by treaty. No nation could gainsay us, for we would 
be in possession of all seas. No nation could war upon us, for we 
would be full of resources and wealth. No nation could counter- 
vail us, for we would control all the productions necessary to her 
existence. We would stand on high and enviable ground, placed 
there by our own wisdom, that made use of natural advantages and 
resources too valuable to nations to be placed on any doubtful 
footing. This young Hercules, that strangled not the serpent in 
its early grasp, will fall, like Laocoon, in the foldings of its wrath." 
Never, in the history of the world, did a nation occupy such a 
position, or have within its reach such means of wealth and oower, 
as the United States. But, for the alternative, substitute Protec- 
tion for "Deo-ree," in the following lines, and we have a true pic- 
ture of the character, tendency, career, and end, of Free Trade i-^ 

" Take but Degree away, untune that string, 
And hark ! what discord follows ! Each thing meets 
In mere oppugnancy. The bounded waters 
Should lift their bosoms higher than the shores, 
And make a sop of all this solid globe. 
Strength should be lord of imbecility, 
And the rude son should strike his father dead ; 
Force should be right ; or rather, right and wrong, 
Between whose endless jar Justice resides, 
Should lose their names, and so should Justice too. 
Then everything includes itself in power ; 
Power into will ; will into appetite ; • 

And appetite, a universal wolf, 
So doubly seconded with will and power, 
Must make, per force, a universal prey, 
And last eat up itself." — Shakspeare. 



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